(Bloomberg) — Shadows over artificial intelligence, the eagerly awaited launch of Bitcoin funds and billions of dollars flowing into the stock market's seemingly unstoppable rise: ETFs have seen it all and been the beneficiaries so far. this year.
First, exchange-traded funds have taken in more than $400 billion, the most in nearly three years. Investors flocked to Bitcoin ETFs, which have pulled in more than $14 billion since their debut in January. And a fund based on Nvidia Corp. has seen his assets grow by more than 2000%.
What follows is a summary of some of the key trends within the ETF space during the first half of 2024:
Equity Torrent
The ETF universe has drawn more than $417 billion since the end of 2023, the fastest pace since the second quarter of 2021, according to data from Bloomberg Intelligence. Equity ETFs alone are on track to reach $262 billion in inflows for the six-month period, just short of the total received during the second half of 2023.
Over the period, the low-cost Vanguard S&P 500 ETF (ticker VOO) has amassed roughly $42 billion, on pace for its best year of flows. Tech-heavy Invesco QQQ Trust Series 1 ( QQQ ) has entered $14 billion, its highest since 2021, data compiled by Bloomberg show.
“It's a combination of a) strong performance from stocks and b) an onslaught of new issuers adding firepower to the overall total,” said Todd Sohn, ETF strategist at Strategas.
Barrage of Bitcoin ETFs
Perhaps the most surprising feature of 2024 has been the array of new ETFs that directly hold Bitcoin, the largest cryptocurrency. More than 10 such funds were launched at the beginning of the year HISTorIcaL circulation and subsequent new all-time highs for the digital token itself.
Taking Grayscale Bitcoin Trust (GBTC) — the only one of the group to have outflows — out of the spotlight, the remaining funds have raised a total of about $33 billion since inception. The iShares Bitcoin Trust (IBIT) has been the biggest beneficiary, with about $18 billion coming in this year. Meanwhile, investors have withdrawn a similar amount from GBTC, which has the highest fee among the group.
“The launch of spot-Bitcoin ETFs has been one of the most talked about launches in the world of ETFs that simultaneously revived interest in the overall crypto market and set a precedent for the future of crypto ETFs”, said Roxanna Islam, head of sector and industry research at VettaFi.
Active posture
Actively managed funds are a popular corner of the overall ETF market, with about $124 billion flowing into such products in the first half of the year. This constitutes 30% of the total load of the ETF-universe. Meanwhile, derivatives-based funds received $14.5 billion.
Issuers are trying to capitalize on the popularity of covered calls and other yield-focused funds with a slew of new launches. Within the universe of high-yield ETFs tracked by Bloomberg Intelligence, a quarter have gone public over the past two years.
Nvidia Frenzy
Unrelenting power over Nvidia has fueled a record $2.7 billion inflow into a fund that gives investors double the daily return of the tech giant and artificial intelligence craze. The GraniteShares 2x Long NVDA Daily ETF (NVDL) started the year with about $210 million in assets, a number that has now grown to more than $5 billion.
While NVDL has returned 370% so far this year — making it one of the best-performing funds of 2024 — it gets disproportionately hurt when its underlying stock falls, as it has recently. rub.
At least 35 ETFs with more than $500 million in assets each have Nvidia making up 10% or more of their portfolios, data compiled by Bloomberg show. In total, these funds have received more than $45 billion so far this year.
“It's one of the stocks you don't want to miss out on, so even if you're not buying individual stocks, you're going to allocate to ETFs with the most exposure,” said Athanasios Psarofagis, an ETF analyst at Bloomberg. Intelligence.