In 2023, the colossal $11.5 trillion global ETF industry wasn't just growing—it was redefining investing, as the astronomical growth of index funds across every market revealed a world rapidly shifting to passive strategies.
Key Takeaways
- In 2023, the global exchange-traded fund (ETF) industry, dominated by index-tracking products, managed assets under management (AUM) totaling $11.5 trillion, marking a 20% year-over-year increase
- The U.S. index mutual fund and ETF market reached $13.2 trillion in AUM by Q4 2023, representing 48% of total U.S. fund assets
- Europe's index fund industry AUM grew to €2.1 trillion in 2023, with passive strategies comprising 42% of total UCITS assets
- The index industry saw net inflows of $1.2 trillion into passive funds globally in 2023
- U.S. index ETFs recorded $800 billion net inflows in 2023, up 15% from 2022
- European passive index funds attracted €250 billion inflows in 2023
- S&P 500 index returned 24.2% total return in 2023
- Nasdaq-100 index delivered 55.1% return in 2023, outperforming broader markets
- Dow Jones Industrial Average gained 13.7% in 2023
- BlackRock's iShares held 38% U.S. ETF market share in index products end-2023
- Vanguard commanded 28% share of U.S. index mutual fund market in 2023
- State Street's SPDRs captured 15% of U.S. equity ETF market share 2023
- Index funds comprised 50% of total U.S. equity fund AUM in 2023
- 60% of new U.S. fund inflows went to passive index products in 2023
- Retirement accounts allocated 45% to index funds by end-2023
The global index fund industry experienced massive growth and record inflows in 2023.
Adoption and Trends
- Index funds comprised 50% of total U.S. equity fund AUM in 2023
- 60% of new U.S. fund inflows went to passive index products in 2023
- Retirement accounts allocated 45% to index funds by end-2023
- Robo-advisors used index ETFs for 80% of portfolios in 2023
- Individual investors held 25% of index ETF shares directly in 2023, up from 20% in 2020
- ESG index ETFs grew to $350 billion AUM globally in 2023, 15% CAGR
- Smart beta index strategies reached $1.5 trillion AUM worldwide 2023
- Active vs passive debate shifted with passive outperforming 85% active funds over 10 years to 2023
- Number of index ETFs launched globally hit 500 new in 2023
- Cryptocurrency index products like BITO ETF reached $2 billion AUM in 2023
- Target-date index funds captured 55% of 401(k) default options in 2023
- Women-led households adopted index investing at 35% rate in 2023, up 10% YoY
- Millennial investors preferred index ETFs with 70% allocation in 2023
- Zero-fee index funds from Fidelity and Schwab attracted $100 billion in 2023
- Direct indexing AUM grew to $500 billion in 2023, customized index strategies
- Buffer ETFs and defined-outcome index products hit $20 billion AUM 2023
- Leveraged/single-stock index ETFs proliferated with 50 new launches in 2023
- International adoption of S&P 500 index products outside U.S. doubled to $1 trillion AUM 2023
- AI-themed index ETFs launched 20 new funds collecting $5 billion in 2023
- Fixed income index ETFs saw record $300 billion inflows in 2023 amid rate hikes
- Commodity index trackers rebounded with 25% AUM growth in 2023
Adoption and Trends Interpretation
The once-rebellious indexing revolution has quietly matured into a quiet but total hegemony, now comfortably entrenched in our retirement plans, embraced by every demographic, and branching into every conceivable asset class, all while the active management guard rails continue to collect dust.
Growth Rates
- The index industry saw net inflows of $1.2 trillion into passive funds globally in 2023
- U.S. index ETFs recorded $800 billion net inflows in 2023, up 15% from 2022
- European passive index funds attracted €250 billion inflows in 2023
- Asia ex-Japan index ETFs grew by 30% AUM in 2023 due to $150 billion inflows
- Canadian index products saw 22% AUM growth in 2023 with CAD 70 billion inflows
- Australian equity index ETFs expanded 28% in 2023 to AUD 150 billion AUM
- Brazilian index funds grew 35% in 2023 amid BRL 100 billion inflows
- Indian Nifty 50 index ETFs doubled AUM to INR 50,000 crore in 2023
- Vanguard index funds grew AUM by 12% in 2023 with $600 billion inflows
- iShares passive ETFs expanded 18% globally in 2023
- SPDR S&P 500 ETF (SPY) AUM increased 25% to $500 billion in 2023
- QQQ Invesco Nasdaq-100 ETF grew 40% AUM to $250 billion in 2023
- VTI Vanguard Total Stock Market ETF AUM rose 20% to $400 billion in 2023
- IVV iShares Core S&P 500 ETF expanded 22% to $450 billion AUM 2023
- SCHB Schwab U.S. Broad Market ETF grew 15% to $30 billion in 2023
- VOO Vanguard S&P 500 ETF AUM surged 28% to $1 trillion in 2023
- IWM iShares Russell 2000 ETF increased 18% AUM to $70 billion 2023
- EFA iShares MSCI EAFE ETF grew 12% to $50 billion in 2023
- BND Vanguard Total Bond Market ETF AUM rose 10% to $100 billion 2023
- TLT iShares 20+ Year Treasury Bond ETF expanded 5% despite volatility in 2023
- GLD SPDR Gold Shares index tracker grew 15% to $60 billion AUM 2023
- SLV iShares Silver Trust increased 20% to $12 billion in 2023
- USO United States Oil Fund LP grew 25% AUM to $2 billion in 2023
Growth Rates Interpretation
The world is voting with its wallets, and from Wisconsin to Warsaw, the clear ballot is for the simple, cheap, and transparent bet that passive index funds are the new, global lingua franca of finance.
Key Players and Market Share
- BlackRock's iShares held 38% U.S. ETF market share in index products end-2023
- Vanguard commanded 28% share of U.S. index mutual fund market in 2023
- State Street's SPDRs captured 15% of U.S. equity ETF market share 2023
- Invesco held 7% global ETF market share focused on index strategies in 2023
- Fidelity Investments owned 10% of target-date index fund market in 2023
- Charles Schwab ETFs represented 5% U.S. market share in low-cost index products 2023
- Global X ETFs held 2% share in thematic index ETFs globally 2023
- WisdomTree captured 1.5% of smart beta index ETF market in 2023
- Amundi led Europe with 12% ETF market share in index products 2023
- Lyxor (now Amundi) held 8% European passive ETF share in 2023
- iShares dominated with 40% European ETF market share end-2023
- Vanguard led Australian ETF market with 25% share in 2023
- BetaShares held 30% Australian index ETF share in 2023
- Nippon India ETF led Indian market with 20% Nifty index share 2023
- UTI Mutual Fund held 15% Nifty 50 ETF share in India 2023
- SPY ETF held 20% of total U.S. ETF AUM in S&P 500 category 2023
- VOO and IVV together captured 45% S&P 500 ETF market share 2023
- QQQ dominated Nasdaq-100 with 50% ETF market share in 2023
- IWM controlled 60% Russell 2000 ETF share end-2023
- BND Vanguard led total bond market ETFs with 35% share 2023
- TLT iShares held 40% long Treasury ETF market share in 2023
- GLD SPDR Gold had 70% physical gold ETF market share globally 2023
Key Players and Market Share Interpretation
The index fund landscape is a kingdom where a few giants reign supreme, each with its own fortified castle—BlackRock and Vanguard preside over vast empires, while niche players like SPY and QQQ command near-total dominance over their specific domains.
Market Size
- In 2023, the global exchange-traded fund (ETF) industry, dominated by index-tracking products, managed assets under management (AUM) totaling $11.5 trillion, marking a 20% year-over-year increase
- The U.S. index mutual fund and ETF market reached $13.2 trillion in AUM by Q4 2023, representing 48% of total U.S. fund assets
- Europe's index fund industry AUM grew to €2.1 trillion in 2023, with passive strategies comprising 42% of total UCITS assets
- Asia-Pacific index ETF AUM hit $1.2 trillion in 2023, driven by launches in China and Japan
- The Canadian index ETF market AUM stood at CAD 350 billion as of December 2023, up 25% from 2022
- BlackRock's iShares brand managed $3.4 trillion in index ETFs globally in 2023
- Vanguard's index funds and ETFs held $5.1 trillion AUM worldwide at year-end 2023
- State Street Global Advisors' SPDR ETFs reached $1.2 trillion AUM in index products in 2023
- Invesco's index ETF AUM grew to $500 billion in 2023, primarily through PowerShares brand
- Fidelity's index mutual funds and ZERO funds managed $1.8 trillion AUM in 2023
- Schwab's index ETFs and mutual funds totaled $800 billion AUM by end-2023
- Global X's thematic index ETFs reached $50 billion AUM in 2023
- WisdomTree's index ETFs AUM was $85 billion in 2023
- First Trust's index portfolios managed $140 billion AUM in 2023
- Direxion's leveraged index ETFs had $30 billion AUM in 2023
- ProShares' inverse and leveraged index ETFs totaled $65 billion AUM end-2023
- The S&P 500 index ETF segment alone represented $1.8 trillion AUM in the U.S. in 2023
- Nasdaq-100 index trackers managed $450 billion AUM globally in 2023
- Dow Jones Industrial Average index funds held $120 billion AUM in 2023
- Russell 2000 small-cap index products reached $250 billion AUM in 2023
- MSCI World index ETFs totaled $1.1 trillion AUM worldwide in 2023
- FTSE 100 index trackers in the UK managed £150 billion AUM in 2023
- Nikkei 225 index funds in Japan held ¥40 trillion AUM in 2023
- CSI 300 index ETFs in China reached RMB 2.5 trillion AUM in 2023
- EURO STOXX 50 index products managed €600 billion AUM in Europe 2023
- Solactive's custom index ETFs totaled $200 billion AUM in 2023
- Bloomberg's index commodity trackers had $100 billion AUM globally 2023
- ICE BofA index bond funds reached $900 billion AUM in 2023
- Global index futures open interest averaged $5 trillion daily in 2023
- Global index options notional value traded $10 trillion monthly average in 2023
Market Size Interpretation
With a $13.2 trillion U.S. stronghold and trillions more chasing benchmarks worldwide, the index industry's quiet dominance has become the unmistakable roar of the market's new master.
Performance Metrics
- S&P 500 index returned 24.2% total return in 2023
- Nasdaq-100 index delivered 55.1% return in 2023, outperforming broader markets
- Dow Jones Industrial Average gained 13.7% in 2023
- Russell 2000 small-cap index returned 16.9% in 2023
- MSCI World index achieved 22.4% return in USD terms for 2023
- FTSE 100 index returned 3.8% in GBP in 2023, lagging U.S. peers
- Nikkei 225 surged 28.2% in 2023, best year since 1987
- CSI 300 index fell -11.2% in 2023 amid economic challenges
- EURO STOXX 50 gained 17.6% in EUR terms in 2023
- S&P/TSX Composite returned 8.1% in CAD in 2023
- ASX 200 index rose 12.2% in AUD in 2023
- Bovespa Ibovespa gained 22.7% in BRL in 2023
- Nifty 50 returned 20.0% in INR in 2023
- Bloomberg Aggregate Bond Index returned 5.5% in 2023
- ICE BofA U.S. High Yield Index gained 13.0% in 2023
- S&P GSCI Commodity Index returned 7.8% in 2023
- MSCI Emerging Markets Index lost -9.8% in USD in 2023
- Over 10 years to 2023, S&P 500 annualized return was 12.0%
- 5-year annualized return for Nasdaq-100 was 20.5% through 2023
- Vanguard S&P 500 ETF (VOO) 10-year annualized return 12.8% as of 2023
- iShares Core MSCI EAFE ETF (IEFA) 5-year return 4.2% annualized to 2023
- SPY SPDR S&P 500 ETF 1-year return 26.3% in 2023
Performance Metrics Interpretation
In a year where the Nasdaq flexed like a tech bro on a sugar rush and the CSI 300 sulked in the corner, the global market delivered a masterclass in "it depends," reminding us that the only universal truth is that diversification prevents both starvation and indigestion.
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