Industry Updates

ETFs in review: Performance and inflow records broken in 2023

A recap of flows, performance and the biggest stories over the year

Theo Andrew

It was another bumper year for the European ETF market with performance and fixed income inflows hitting near new highs.

It was a record-breaking year for at least one ETF, with the VanEck Crypto and Blockchain Innovators UCITS ETF (DAPP) smashing the ETF performance record for a single year, booking returns of 277%.

The hype around artificial intelligence (AI) also drove several tech-related themes such as semiconductors and the metaverse.

The AI-frenzy did not extend to clean energy, however, while China’s well-documented performance funk also weighed heavy on investor portfolios.

Investors continued to pile into US equities, despite overconcentration fears, while bond ETFs posted their strongest year on record with $65bn inflows.

Smart beta ETFs fell out of favour with investors while mid-duration US Treasury ETFs also sold off as investors opted for a barbell approach in a bid to manage interest rate risk.

In the second-highest year for ETF inflows on record, BlackRock continued to dominate while DWS and Vanguard boosted their share of the European ETF market, according to data from ETFbook.

The return of the ETF price war and new market entrants dominated the news flow last year while the return of fixed income dictated market narratives.

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