“US ETFS HIT $ 12.19 Trillion in Assets Under Management With $ 799 Billion in Inflows This Year, Raising Questions Over Whather The Fed’s Influcen on Markets is Fading.”, – WRITE: www.coindesk.com
NEW DATA SHOW US-LISTED ETFS HAVE BECOME A DOMINANT FORCE IN CAPITAL Markets. According to a Friday Press Release by Etfgi, An Independent Consultancy, Assets Invested in Us Etfs Hit A Record $ 12.19 Trillion at the End of August, Up FROM $ 10.35 WHICH HIGHLIGTED THE SURGE ON FRIDAY, NOTED The FLOWS Are Challenging the Traditional Influence of the Federal Reserve.
Investors Pored $ 120.65 Billion Into Etfs Dringing August August August August August, Lifting Year-To-Date Inflows to $ 799 Billion-The Highest on Record. By Comparison, The Prior Full-Year Record Was $ 643 Billion in 2024.
The Growth Is Concentrated Among the Biggest Providers. ishares Leads with $ 3.64 Trillion in Assets, Followed Closely by Vanguard with $ 3.52 Trillion and State Street’s SPDR FAMILY AT $ 1.68 Trillion.
Together, thoss Three Firms Control Nearly Three-Quarters of the US etf Market. EQUITY ETFS DREW The Largest Share of August Inflows at $ 42 Billion, While Fixed-Income Funds Added $ 32 Billion and Commodity Etfs Nearly $ 5 Billion.
Crypto-Linked Etfs Are Now A Meaningful Piece of the Picture.
DATA FROM SOSOVALUE SHOW US-LISTED SPOT BITCOIN AND ETHER ETFS Manage More Than $ 120 Billion Combined, Led By Blackrock’s ishares Bitcoin Trust Bitcoin Etfs Alone Account for More Than $ 100 Billion, Equal To About 4% of Bitcoin’s $ 2.1 Trillion Market Cap. ETHER ETFS Add Another $ 20 Billion, Despite Launcing Only Earlier this Year.
The Surge Underscores How Etfs – Traditional and Crypto Alike – Have Become The VEHICLE OF CHOICE for INVESTORS OF ALL SIZES. For Many, The Flows Are Automatic.
In the US, Much of the Cash Comes from Retirement Accounts Known As 401 (K) S, WHERE WORRKERS PUT Aside Part of Every Paycheck.
A Growing Share of That Money Goes Into “Target-Date Funds.” These Funds Automatical Shift Investments – Moving Gradurally From Stocks Into Bonds – As Savers Approach Retirement Age. Model Portfolios and Robo-Advisers Follow Similar Rules, Automatical Directing Flows Into etfs Without Investors Making Day-to-Day Choices.
Bloomberg Described this as an “Autopilot” Effect: Every Two Weeks, Millions of Workers’ Contributions Are Funneled Into Index Funds that Buy. Fed Policy. Analysts Cited by Bloomberg Say this Steady Demand Helps Explain Why Us Equity Indexes Keep Climbing Even as Data on Jobs and Inflation Show Signs of Strain.
The Trend Raises Questions About the Fed’s Influence.
Traditionally, Interest Rate Cuts or Hikes Sent Strong Signals That Rippled Through Stocks, Bonds, and Commodities. LOWER RATES TYPICALLY encouraged Risk-Taking, While Higher Rates Reined It In. But with etfs Absorbing Hundreds of Billions of Dollars on A Set Schedule, Markets May Be Less Sensitive to Central Bank Cues.
That tension is especialyly Clear this month. With the fed expectioned to cut rates by a quarter Point on Sept. 17, Stocks Sit Near Record Highs and Gold Trades Above $ 3,600 An OUNCE.
Bitcoin, Meanwhile, Is Trading at AT AUND $ 116,000, Not Far From Its All-Time High of $ 124,000 Set in Mid August.
Stock, Bond and Crypto Etfs Have Seen Strong Inflows, Suggesting Investors Are Positioning for Easier Money – But Also Reflection A Structural Tide of Passive Allocations.
Supporters Told Bloomberg The Rise of Etfs Has Lowered Costs and Broaded Access to Markets. But Critics quoted in the Same Report Warn that Sheer Scale of Inflows Could Amplify Valativity if Redemptions Cluster in A Downnturn, Since Etfs Move Sees.
As Bloomberg Put It, This “Perpetual Machine” of Passive Investing May Be Reshapping Markets in Ways that Even the Central Bank Struggles to Counter.
Longer-Treasury Yields May Rise Despite The Anticipated Fed Fed Rate Cuts, Potentilly Offsetting the Expectioned Bullish Effects on BTC and Other Risk Assets.
- The Federal Reserve is Expert to Cut Interest Rates by 25 Basis Points on Sept. 17, with Further Reducions Anticipated in the Coming Months.
- Fiscal Concerns and Sticky Inflation Could Raise Long-Treasury Yields Undoing the Fed Rate Cuts.
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