Mutual Funds Are Losing Ground To Exchange-Traded Funds, But Remain Dominant In Overall Size And In 401 (K) Retirement Accounts

Mutual Funds Are Losing Ground To Exchange-Traded Funds, But Remain Dominant In Overall Size And In 401 (K) Retirement Accounts

Share to Linkedin While mutual funds have been suffering outflows in recent years as exchange-traded funds (ETFs) attracted record inflows last year, the mutual funds market is still too huge to ignore and remain popular in key retirement packages. A Wall Street sign at the New York Stock Exchange (NYSE) on February 17, 2021 in New York City. ... [+] (Photo by Angela Weiss / AFP) (Photo by ANGELA WEISS/AFP via Getty Images) In 2020, ETFs attracted a record $502 billion in assets - 11% higher than the prior year, said Morningstar, an investment research firm based in Chicago, while mutual funds suffered a record $289 billion in outflows. Of the total ETF inflow in 2020, taxable-bond ETFs accounted for $195 billion, the highest of any category group. But mutual funds, with a total of $18. 2 trillion in assets, still dwarf ETFs, which have about $5. 5 trillion in assets. During the equity market meltdown in March 2020, investors pulled out a record $336 billion from mutual funds. Despite the subsequent rally in stocks, mutual funds did not recover, as more investors appeared to favor ETFs. Phil Blancato, CEO of Ladenburg Thalmann Asset Management, which manages $3. 5 billion