New US ETF launches set annual record -Morningstar

By Suzanne McGee

(Reuters) – There have already been 478 new exchange-traded funds (ETFs) launched in the U.S. this year as of Wednesday, a new annual record, according to data from Morningstar.

That number, fueled by the record $7.65 billion invested in ETFs, is likely to climb still higher, analysts at Morningstar and other firms said. At least another dozen ETFs are scheduled to make their debut over the next week, according to Strategas, an investment advisory firm.

The previous record was set in 2021, when ETF managers rolled out 477 new funds. Last year, quiet by comparison, was still the second-busiest ever, with 407 ETF debuts. It has been clear since October that the pace had picked up this year.

“The wheels are in motion,” said Todd Sohn, ETF analyst at Strategas.

The vast majority of ETF launches this year — some 76%, according to Morningstar Direct estimates — have been of active ETFs rather than funds designed to track some kind of index.

Another big theme in 2023 has been the interest in ETFs that can deliver a steady stream of income.

“It’s the current craze,” Sohn said. “A lot of managers are rushing to mimic” multi-billion dollar ETFs like the JPMorgan Equity Premium Income ETF, and the JPMorgan Nasdaq Equity Premium Income ETF.

Sohn said there was no reason to believe the flood of new ETF issuance will slacken next year. Still, he and other ETF analysts are watching the rate at which some recently launched ETFs have been closed.

ETF providers have shuttered 208 funds so far this year, but as a percentage of new issuance or the total number of funds, that falls well short of a record. Still, given the increasingly crowded ETF landscape, several say they are monitoring the figure.

The data measures U.S.-based ETFs in all categories and asset classes.

(Reporting by Suzanne McGee; Editing by David Gregorio)