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Data Insights/2023: The Year in U.S. ETPs - Part 1

2023: The Year in U.S. ETPs

Part 1 - The big picture

Author
Steven W. Poser

Director of Research

Published
January 11, 2024

U.S.-listed Exchange Traded Products (ETPs) continued to grow in 2023, with total products rising to an all-time high of 3,368 from 3,074 at the end of 2022. Total AUM also grew from $6.5tn to $8.1tn. ETPs accounted for a smaller share of total U.S. equity market trading, falling to 30% of notional volume from 33% in 2022.

It has also been another strong year for NYSE Group’s ETP franchise. NYSE Group attained several milestones, reaching a record of more than 2,100 listed products. In addition, NYSE now boasts 13 ETPs trading on the NYSE floor, from just one at the end of 2022, with nine more listing since the start of 2024, including four transfers from other exchanges and more to come. Listing on the NYSE offers access to the exchange’s unique market model and liquidity providers, offering enhanced market quality as noted in our earlier post, along with access to the industry’s most knowledgeable team of advisers to assist new and existing issuers.

NYSE Group continues to dominate the ETP business, listing 75% of all Assets Under Management (AUM). NYSE Group funds accounted for 69% of new flow into ETPs in 2023 as well.

Over a series of pieces, we will review some of the major trends in ETPs in 2023, including active funds, cryptocurrency, and shifts in asset class AUM. Let’s look at the big picture landscape first.

Assets under management

Equities remain the largest asset class in the ETP universe, accounting for nearly 80% of AUM. Fixed Income funds stand a distant second at 18%. No other asset class even reaches 2%.

Chart 1: U.S. - Listed ETP AUM percentage by asset class

Note: All AUM and fund flow data source Track Insight. All other data source NYSE Research.

NYSE Arca and NYSE remain the dominant listing venue for ETPs, controlling 75% of AUM in U.S.-listed products, with 81% of equity ETPs, and more than 90% in commodity funds.

Chart 2: ETP AUM Share by listing venue and asset class

ETP fund flows

Despite U.S. equities finishing at/near record levels in 2023, much of the market’s gains were focused in a few large cap tech stocks. Gains were not broad based, with the equal-weighted S&P 500 gaining only 11.6% for the year, compared to 24.2% for the market-cap weighted index. The mid-cap S&P 400 and small-cap S&P 600 saw even weaker performance, rising 14.4% and 13.9% respectively. Through the first three quarters of the year, the S&P 600 was down 0.5% and the equal weight S&P 500 only eked out a 0.3% gain. This likely helps to explain why equity ETPs accounted for only 67% of fund flows, well below their nearly 80% share of market AUM. Fixed Income funds garnered 34% of the flows, while commodity funds witnessed net outflows as notably higher yields attracted investor interest, especially relative to the narrow gains in equities prior to the fourth quarter.

Chart 3: ETP Share of fund flows by asset class

Conclusion

2023 was another successful year for ETP growth. AUM in U.S.-listed funds increased by 25% to $8.1 trillion, with a net increase of 294 funds in 2023, resulting in 3,368 ETPs listed at the end of the year. In the upcoming weeks we will continue to dissect some major trends in the U.S. ETP market.

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