Where ETF Investors Put Their Money in 2024

Investors poured record amounts into exchange-traded funds in 2024, with active ETFs continuing to grow their market share and categories like cryptocurrency ETFs exploding in popularity. New money broke the $1 trillion mark for the first time last year, bringing total ETF assets to $10.3 trillion. Meanwhile, traditional mutual funds saw $388 billion in outflows.

Key Takeaways From 2024 ETF Flows

• Riding the bull market for stocks, investors flocked to large-blend and large-growth ETFs.
• Active ETFs grew their market share at the fastest rate in years, with investors continuing to put money to work at JPMorgan’s option income funds even as more firms entered the active ETF space.
• Cryptocurrency ETFs boomed with the launch of spot bitcoin ETFs. Investors flocked to iShares, while previous market leader Grayscale saw money pour out the door.
• Option income funds and multisector bond ETFs attracted major flows, helping drive the adoption of active ETFs.

Here’s a closer look at some of the biggest ETF trends of 2024.

Investors Poured Money Into Large-Blend and Growth Stock ETFs

With the bull market roaring ahead in 2024 thanks largely to big gains in mega-cap technology stocks, investors piled into the core stock ETF categories that benefited most from the rally. Flows into large-blend ETFs (home to S&P 500 Index funds) jumped 80% from the prior year’s pace. Meanwhile, with growth stock funds gaining 27.7% for the year, investors more than doubled the new cash sent in that direction. Overall, net inflows to stock ETFs totaled $757 billion in 2024.

ETF investors seemed to do more than chase performance. The $61 billion in new money put to work in foreign large-blend funds came even as the category returned 4.7% in 2024, far below what US stocks saw.

Investors Stepped Up Bond Flows in Key Categories

It was a roller-coaster year for bond funds, but that didn’t stop people from investing more in bond ETFs, which pulled in $276 billion in 2024. Core bond ETFs (the foundation of most portfolios) saw flows jump 21% to $57 billion. Ultrashort bond ETFs (a defensive destination) experienced an 18% rise. Meanwhile, intermediate government ETF flows rose 67% to $37 billion.

IShares and Vanguard Still Reigned, but Invesco and JPMorgan Racked Up Flows

Industry titans iShares and Vanguard again took in the lion’s share of ETF money in 2024. With close to 60% of total ETF flows between them, Vanguard’s $308 billion haul surpassed iShares’ $287 billion. Last year marked the fifth year in a row that Vanguard has pulled in the most flows of any ETF brand.

While those two giants hold the most ETF assets, other firms still attracted significant dollars. Invesco pulled in the third-most flows—$88 billion for the year—bringing its ETF assets to $631 billion. It rose to third place from fifth last year, beating out 2024’s fourth-place firm, State Street, which holds $1.5 trillion in assets but managed only $80 billion in flows. The $320 billion Invesco QQQ Trust QQQ was a major driver, pulling in $29 billion in 2024, compared with just $6.9 billion the previous year. The QQQ ETF tracks the Nasdaq-100 Index, which offers substantial exposure to the large-cap tech stocks that drove 2024’s rally.

Fifth place went to JPMorgan, whose strong position in the fast-growing active ETF segment helped it bring in $43 billion in 2024 flows despite having the smallest ETF asset base of the five, at just $182 billion.

Active ETF Growth Accelerated

Active ETFs had a record-breaking year. The segment pulled in $293 billion in flows, which accounts for 26% of total ETF flows, up from 21% in 2023. This puts the organic growth rate for active ETFs at 56%—the highest in over a decade. These huge flows have helped active ETFs grow their market share. They’re now 9.2% of total ETF assets, up from 2.5% in 2019, when a regulatory change led to their proliferation.

Investors Spread the Wealth Among Active ETF Brands in 2024

As investors put more money into active ETFs, they also directed that cash to a wider group of fund companies. In 2023, 16 brands received more than $1 billion in ETF inflows. That number exploded to 36 in 2024. Similarly, the five ETF brands that received the most flows in 2024 made up just 50% of total active ETF flows, down from 69% in 2023 and 81% in 2022.

Investors Fled Grayscale Bitcoin ETF and Flocked to iShares

A regulatory change prompted the explosion of digital asset ETFs, which invest in cryptocurrency, in 2024. In January, the SEC allowed the launch of the first spot bitcoin ETFs. These funds can directly hold the cryptocurrency rather than track its price via derivatives.

Dozens of new ETFs launched in the category during the year, attracting $57 billion. That was more than 4 times the $13 billion these funds received in 2023. Over half of those inflows went to a single ETF, the $51 billion iShares Bitcoin Trust IBIT, creating yet another area dominated by the iShares brand. Meanwhile, the $19.7 billion Fidelity Wise Origin Bitcoin ETF FBTC pulled in $12 billion, as much as all other funds in the category except one.

But it wasn’t all good news for crypto funds. The clear loser was Grayscale Bitcoin ETF GBTC, from which investors pulled $22 billion in 2024. The fund ended 2023 with $26 billion in assets. The approval of spot bitcoin ETFs was set in motion by a lawsuit Grayscale launched against the SEC to convert its Grayscale Bitcoin Trust into an ETF. The firm won the suit, but investors abandoned its ETF in droves. Its expense ratio is 12.5 times as high as the iShares’ and 6 times as high as the Fidelity Fund’s.

Derivative Income Funds Were a Microcosm of Active ETFs, Growing and Broadening

Another hot corner of the ETF market was derivative income funds—often called “buy-write” or “covered call” funds. These ETFs generate income with derivatives, like options on an underlying asset. While this is an established strategy among traditional mutual funds, it’s only recently begun to catch on among ETFs. The category attracted $33 billion, bringing it to $97 billion—a long way from the $3 billion the group held at the end of 2020.

The dominant derivative income players are the $37 billion JPMorgan Equity Premium Income ETF JEPI and the $21 billion JPMorgan Nasdaq Equity Premium Inc ETF JEPQ, which received the vast majority of all flows to the category in 2022 and 2023. In 2024 they made up less than half of all flows to the category as other brands entered the space and investors took notice. Five funds from other firms surpassed $1 billion in annual flows in 2024.

Multisector Bond Funds Exploded, Lending Force to Active ETF Growth

Multisector bond ETFs also helped power the growth of active ETFs in 2024. These funds invest in a variety of bonds; they are generally considered riskier than core-plus funds but less risky than high-yield funds. They raked in $13 billion during 2024, growing to $17 billion in assets, up from just $3 billion the year before. In terms of organic growth (which compares flows to starting assets), this represented a gain of 378%, higher than any other ETF category.

Multisector bond funds delivered strong gains in 2024, as riskier fixed-income strategies thrived thanks to the strength of the economy, returning 5.8% for the year. Within the category, investors flocked to the $7 billion iShares Flexible Income Active ETF BINC, which launched in May 2023 and took in $6.5 billion in 2024.