This issue of The Cerulli Edge—U.S. Monthly Product Trends analyzes mutual fund and exchange-traded fund (ETF) product trends as of July 2024 and examines advisors' increased use of ETFs.

Highlights from this research:  

• In July, mutual fund assets grew $332 billion (1.7%) on $39.5 billion of total net outflows, representing an organic growth rate of -0.2%. Total asset growth for 2024 measures $1.6 trillion despite total net outflows of $175 billion.

• In July, ETF assets grew $329 billion (3.6%), with $119 billion attributed to net inflows, marking their second-strongest month ever. In 2024, ETF assets have increased $1.4 trillion (16.8%), with net flows totaling $526 billion, representing an organic growth rate of 6.5%.

• Advisors are increasing allocations to ETFs as they become more comfortable with the product and its use across a wider range of asset classes. Nearly all advisors (90%) use the product in some capacity. Active managers may provide value, but nearly two-thirds of advisors (61%) agree or strongly agree that it is difficult to identify active managers that will outperform indexes consistently. Hybrid RIA advisors allocate the highest percentage of assets to actively managed ETFs across all channels, and numerous asset managers are dedicating resources to expand their product lineup to include more active ETFs.