Strategic Beta ETF Market Still Expanding

Net new inflows into strategic-beta exchange traded products globally amounted to $87 billion, an organic growth rate of nearly 11%.

Ben Johnson 13 March, 2019 | 9:10AM

Target Funds

Strategic or smart exchange traded products (ETPs) continued to expand in 2018, with net new inflows of $87 billion, translating to an organic growth rate of nearly 11%. Over the past decade-plus, strategic-beta ETPs' market share has expanded considerably. Growth has been driven by new cash flows, new launches, and the entrance of new players—some of which are traditional active managers. However, more recently, the pace of these products' market share gains has decelerated as exchange-traded funds tracking more-traditional benchmarks have been garnering their fair share of net new flows.

At the end of December 2018, there were 1,493 strategic-beta ETPs, with collective assets under management of approximately $797 billion worldwide.

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About Author

Ben Johnson

Ben Johnson  is director of passive funds research at Morningstar.

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