CNBC Television
Momentum and private assets: The trends driving ETFs to record inflows
11/5/2025, 9:46:00 PM
Economic Summary
- ETF industry saw about $1.11 trillion of net inflows by end of October 2025, making 2025 the strongest year on record for ETF flows and indicating broad investor demand across equities, fixed income, gold, and crypto.
- Low-cost beta is dominating new flows: roughly $500 billion went into S&P 500 exposures and low-fee core products (e.g., SPYM and similar Vanguard/iShares offerings), highlighting price sensitivity for core allocations.
- New ETF growth is concentrated in private assets, private credit, digital assets/crypto, income and thematic strategies; State Street partnerships with BX, APO and Bridgewater are accelerating adoption and product flows.
- Fee differentiation is widening: investors accept higher fees for differentiated access (Bitcoin ETFs, private-credit ETFs, active/thematic strategies) while core allocations remain fee-sensitive; GLDM cited as a low-cost gold option.
- Market momentum, driven by AI and large-cap tech, is sustaining index gains (S&P, Nasdaq) and delaying broad sector rebalancing, implying potential concentration risk until earnings or macro signals slow the trend.
Bullish
- Record ETF inflows in 2025 signal broad investor demand for ETF wrappers
- Low-cost S&P 500 exposures capturing ~half of new flows (SPYM, Vanguard, iShares)
- Private-asset and private-credit ETFs scaling quickly via partnerships (BX, APO, Bridgewater)
- Thematic ETFs like NUKZ benefiting from AI momentum as complementary exposures
- Investors willing to pay premiums for Bitcoin and private-credit ETF access
Bearish
- Market concentration in AI/tech creates vulnerability to a sharp correction
- Rebalancing away from mega-cap momentum unlikely until clear slowdown in earnings
- Higher-fee thematic and private-credit ETFs risk underperformance if their themes cool
- Fee compression in core low-cost ETFs could pressure issuer margins
Bullish tickers
SPYMGLDMNUKZPCRSTTBXAPOBRIDGEWATERVANGUARDISHARES
SPYM
Bullish
Strong inflows in 2025 and approaching a major AUM milestone, benefitting from low-cost S&P 500 exposure.
Bearish
Concentration risk from heavy index/tech momentum could hurt if market leadership rotates.
GLDM
Bullish
Among the cheapest gold ETFs and gaining traction as a low-cost commodity hedge.
Bearish
May underperform in prolonged risk-on rallies driven by tech momentum.
NUKZ
Bullish
Popular thematic ETF capturing investor interest in nuclear energy as a complementary exposure linked to AI trends.
Bearish
Thematic risk and higher fees could drag returns if the nuclear/AI narrative cools.
PCR
Bullish
Example of innovation in private-credit access via ETF wrapper, attracting investor interest.
Bearish
Higher fees and potential liquidity/complexity concerns versus core ETFs.
STT
Bullish
As State Street, the issuer is benefiting from record ETF inflows and product innovation across private assets and digital offerings.
Bearish
Fee compression in core products and reliance on continued inflows could pressure profitability.
BX
Bullish
Partnering with ETF issuers to democratize private assets, helping drive product-level flows.
Bearish
Private-asset valuations and flows could be cyclical and sensitive to market stress.
APO
Bullish
Partner for private-asset ETF products, supporting distribution and investor access to private credit.
Bearish
Exposure to private-credit cycles and illiquidity risks in stressed markets.
BRIDGEWATER
Bullish
Bridgewater partnership (all-weather ETF) has crossed $600M and is accelerating flows, signaling investor appetite.
Bearish
All-weather strategies can lag in prolonged strong risk-on environments.
VANGUARD
Bullish
Vanguard's low-cost S&P 500 products remain major beneficiaries of core ETF flows.
Bearish
Intense fee competition limits differentiation and margin expansion for issuers.
ISHARES
Bullish
iShares S&P 500 offerings also capturing significant inflows alongside other large issuers.
Bearish
Core ETF competition pressures issuer economics despite scale.
People mentioned
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