The divergence in assets is just the latest evidence to show how individual and large investors are changing the way they put money to work. Wealth advisers are shifting client assets into portfolios filled with ultra-cheap funds and cost-conscious institutional investors have taken money out of hedge funds and allocated more to funds that match the performance of broad swaths of the market.
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ETFs Now Have $1 Trillion More Than Hedge Funds
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The movement of money has caused a shift in power on Wall Street from professional investors that promise outsize returns generated by savvy bets to less flashy so-called passive investing that aims to match the market. In the first half of this year, ETFs around the world attracted a net $347.7 billion in net new assets, according to ETFGI. Meanwhile, hedge funds attracted a net $1.2 billion, according to HFR. Hedge funds still outnumber ETFs by more than 1,000 globally, despite their slower growth.
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