The Global X Research Team is pleased to announce the June 2024 release of the Derivative Strategy ETF Report, in which we seek to examine the continuous growth of derivative-oriented strategies implemented within the ETF structure. The key takeaways below, as well as those highlighted within the report, recap Global X’s classification system for the derivative strategy ETF landscape. They also provide industry-level analysis of derivative strategy ETF investing through an investigation of changes in assets under management (AUM) and fund flows that signify potential trends.
Derivative Strategy ETF Landscape – June 2024 Key Takeaways
- Appreciating market values likely had a material impact on the assets attained by derivative-based ETF strategies in the second quarter. This was exemplified by funds that operate using Risk Management objectives, specifically, which saw flow momentum remain relatively stagnant, but AUM expanded 14%, to about $52.9 billion.1
- Issuers seem to have their finger on the pulse of the market with six new funds launched in the second quarter recognizing more than $50 million in net flows.2 Some examples include pre-existing defined-outcome strategies that have been rebooted to address new outcome periods. However, new products geared toward addressing Tail Risk and providing Economic Leverage also appeared to move the needle.
- In the second quarter, investors seemed to shake off concerns over inflation and the potential for additional interest rate hikes by the Federal Reserve, harnessing increased leverage via Performance Enhancement derivative-based ETFs to take on some additional risk. This is in direct contrast to the first quarter, when flows toward funds operating with that objective were roughly $180 million in the red.3
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