Exchange-traded fund inflows have topped monthly records in 2024, and managers believe a boom in money market funds could have an impact on inflows before the end of the year.
“Given that there’s over $6 trillion sitting in money market funds, I do think that’s really the biggest variable for the rest of the year,” ETF Store President Nate Geraci told CNBC’s “ETF Edge” this week. “Whether it’s flows into REIT ETFs Or the broader ETF market, those are going to be real potential catalysts to watch.”
Total assets of money market funds hit a new high of $6.24 trillion last week investment company association. Assets have reached a peak this year as investors await a rate cut from the Federal Reserve.
“If yields fall, money market fund returns will fall as well,” Matt Bartolini of State Street Global Advisors said in the same interview. “So as interest rates come down, we would expect to see Some of the capital that had been sitting on the sidelines when cash cooled off again is starting to come back into the market.”
Bartolini, head of the firm’s SPDR Americas Research, believes money will flow into stocks, other high-yield areas of the fixed-income market and parts of the ETF market.
“I think one of the areas that I think could potentially improve is gold ETFs,” Bartolini added. “They’ve had about $2.2 billion in inflows over the past three months, which is very strong compared to last year. So I think the future is still bright for the industry as a whole.
At the same time, Geraci expects large-cap ETFs to benefit. He also believes this shift could be promising for ETF inflow levels as they A record $909 billion by 2021.
“Assuming the stock market doesn’t experience a major correction, I think investors will continue to allocate here and ETF inflows could break this record,” he said.
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