ETFs have been the driving force behind recent market gains in the US, but don’t expect the S&P 500 to end the year higher than current levels, new research has warned.
Equity ETFs fared much better than their active counterparts in 2016 gathering inflows just as active funds suffered withdrawals. The volatility caused by political events in the UK and US could be partly to blame, as Lipper believes investors are opting for shorter-term plays on the stock market.
Moody’s has published a report forecasting that passive funds will surpass 50% of the investment market in the US by 2024 at the latest, given the growth trends in this area of the market and the outflows from active funds. The agency foresees a similar growth pattern in other areas of the world, too, albeit from a lower starting point.