Wall Street is joining the ETF trend

ETFs have attracted more money in seven months than almost any single year on record. As high as $488.5 billion and continuing to increase, it could break the full-year record of $497 billion set in 2020 within weeks or even days.

ETFs are vehicles for pooling investors' money, just like mutual funds. The difference is that they trade throughout the day like stocks. Originally created more than 30 years ago, their popularity has exploded since the 2008 financial crisis. A brutal economic crisis, heightened mistrust on fund managers, luring investors to passive, transparent ETFs. saw U.S.-Linked funds double in assets to $1 trillion by 2010. History is repeating itself, with last year's pandemic-induced crash sparking a rush to ETFs again.

Fund assets in the U.S. have jumped to a record $6.6 trillion, up from $3.7 trillion at the peak of last year's selling pressure. ETFs saw net inflows of $497 billion in 2020, and mutual funds saw net outflows of $506 billion.

Investors have turned to cheaper, easier-to-trade and more tax-efficient investment vehicles. Now, even the best-known fund managers are launching ETFs to avoid getting out with market trends, and some fund managers, like Vanguard Group, are helping clients switch to ETFs. Almost all of the 25 largest U.S. asset managers offer or plan to offer ETFs. The biggest one, Capital Group, is planning to join the club soon.

Wall Street investment managers couldn't stop the rush to ETFs and decided to follow.