Investment Operations

DIGITAL ASSET PRODUCT DEVELOPMENT CONTINUES DESPITE SLOWING FLOWS

Digital Asset Custody and Servicing

The most recent issue of The Cerulli Edge—U.S. Monthly Product Trends analyzes product trends as of November 2022, with a special focus on taxable bond mutual funds and digital asset exchange-traded funds (ETFs).

Highlights from this research:

  • Mutual fund assets climbed above $17.0 trillion during November, increasing approximately 5%. Net flows remain negative, coming in at -$107.6 billion for November. Taxable bond mutual funds, which had been a destination of positive net flows in recent years, have endured net outflows in excess of $150 billion November 2022 YTD, more than any other asset class.
  • ETF assets soared 6.8% to more than $6.7 trillion during November, driven by positive equity and fixed-income market appreciation, as well as net flows of $54.4 billion. This marks the second month in a row that ETFs have posted high, single-digit asset growth.
  • Flows into digital asset exchange-traded products slowed to a halt in 2H 2022 after initially remaining strong in 1H 2022 as digital asset prices dropped precipitously from highs. Recent events affecting FTX and connected businesses may have dampened digital asset sentiment in the short term, but many believe it will simply speed up inevitable regulation. Digital asset products that are directly linked to spot cryptocurrency prices sustain significant deviations of share value from NAV, while products investing in adjacent technologies that use authorized participants are more efficiently priced.