ETFs

Why Are Investors Adding to ETFs at Record Pace?

By Solomon G. Teller, CFA, Chief Investment Strategist, Green Harvest Asset Management

Research shows a big part of why ETFs have received such high relative inflows is that they have a proven history of tax efficiency versus mutual funds. This advantage may be even more important today with stock indexes near record highs, despite last week’s slight decline.

ETF net flows of over $600 billion year-to-date are already greater than full-year flows last year and nearly double the level of inflows in 2019 – see chart. While some say the inflows could be investors chasing stocks in a rising market, ETFs are clearly gaining speed over mutual funds, which have seen net outflows the last few years.

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To learn more about the innovative role of ETFs in tax-beneficial investment strategies, visit our website or talk to your financial advisor.


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