Global ETF Flows Slowed in 2018 as Volatility Gripped Markets

While volatility riled global markets in 2018, inflows into ETFs and mutual fund industry decelerated to their slowest pace since 2011.

According to Morningstar data, global net flows into exchange traded products and mutual funds slowed to $606 billion 2018, compared to the $2 trillion for 2017.

Breaking down the various categories, money market-related funds experienced their best year since $2008 with inflows of $331 billion. Meanwhile, for the first time since before the financial crisis, Asia enjoyed its strongest regional long-term flows of $169 billion, supported by an intervention from the Bank of Japan.

“Amidst an equity market correction and concern over credit markets, risk aversion was most evident among fixed-income funds,” Kevin McDevitt, senior analyst and author of the Morningstar Global Fund Flows Report, said in a note. “Overall, we saw investors become more strategic and less performance-driven when it came to equity funds, while they cut credit risk and sought shelter among short-duration vehicles, choosing to put $331 billion into money-market funds.”