ETFs are catching up with mutual funds

Article Excerpt

Exchange-traded funds are well suited to index-tracking investment strategies. And compared to mutual funds, they generally offer investors much lower fees and higher liquidity. It is therefore not surprising that the total amount of assets held in index ETFs globally are rapidly catching up with index-tracking mutual funds. According to the most recent data, worldwide index ETFs had assets under management of $8.66 trillion at the end of June 2020, just shy of the assets held in similar mutual funds. In the U.S., the index-tracking ETFs already exceed the assets held by their mutual fund equivalents. At the same time, though, in Canada, the total assets under management in the ETF industry ($307 billion) are still well below the $1.95 trillion held in mutual funds. However, net flows into Canadian ETFs have exceeded flows into mutual funds every year since 2018. So, clearly, consumers are narrowing the gap. gap. …

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