In 2024, exchange-traded fund (ETF) inflows have reached record levels, surpassing monthly records. Experts predict that these inflows could be further impacted by the money market fund boom before the end of the year.
Nate Geraci, president of The ETF Store, believes that the over $6 trillion parked in money market funds is a significant factor to watch for the remainder of the year. As the Federal Reserve considers a rate cut, the return on money market funds could decrease, leading investors to move their capital into other areas such as stocks, higher-yielding fixed income products, and ETFs.
Matt Bartolini of State Street Global Advisors anticipates that the money market funds' capital may flow into gold ETFs, which have seen strong inflows in recent months. He also expects large, megacap ETFs to benefit from this transition, potentially reaching record levels of inflows.
Geraci shares a similar sentiment, stating that if stocks remain stable, investors are likely to continue allocating their funds towards ETFs, potentially breaking previous records set in 2021.
Overall, experts in the industry remain optimistic about the future of ETF inflows, with various sectors expected to benefit from the current market conditions. As investors look for alternatives to money market funds, ETFs present a promising option for those seeking higher returns.
It will be interesting to see how the market evolves in the coming months and whether ETF inflows will indeed reach record levels as predicted by industry professionals.