Sunday, November 6, 2022
HomeWealth ManagementUnhealthy yr for Wall Road hasn’t stopped tons of of billions in...

Unhealthy yr for Wall Road hasn’t stopped tons of of billions in US ETF flows


Learn extra: Details vs Fiction: 5 myths of ETF liquidity and buying and selling

Todd Rosenbluth, head of analysis at consultancy VettaFi, added that “it’s an indication that ETFs have turn into mainstream, and extra traders are seeing the advantages regardless of, or certainly due to, the volatility”.

The sturdy efficiency of ETFs in 2022, in response to Ju-Hon Kwek, senior accomplice at McKinsey, known as into query the generally held perception that “ETF growth requires a ‘risk-on’ local weather.”

Kwek emphasised that this yr noticed the emergence of a “notable sample,” during which investments into comparable ETFs often adopted outflows from energetic mutual funds just a few months later.

He attributed this pattern to “tax loss harvesting,” the place retail traders promote mutual funds when they’re dropping cash to keep away from paying capital positive factors tax and investing the proceeds in ETFs, which profit from a extra investor-friendly tax construction and, typically, cost decrease charges.

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