The combined pile of cash invested in ETFs is thought to have eclipsed the money held in more established tracker funds that follow major indices.
ETF assets under management (AUM) reached $US7.71bn in December versus US$7.76bn for tracker funds, but ETFs have now passed US$8.3bn, the Financial Times has reported, using data from the Investment Company Institute (ICI) and ETFGI.
In the US, where ETFs incur lower tax than mutual funds, there was US$5.6bn held in ETFs at the end of March, compared with nearer US$5tn in index funds and roughly US$15bn in active mutual funds.
Investment research firm CFRA said ETFs were attracting so much money as they offer a wider choice of options than traditional funds, while fund's like Cathie Wood's ARK Innovation ETF have captured investor imaginations with their winning performance last year.
The sheer number of ETFs has for a long while put trackers in the shade, with over 6,700 ETFs around the world as of December, according to the ICI, versus just under 3,200 for index funds.
Investors desire to reduce fees has also driven the shift from active to passive, according to strategists at Bernstein.
Bond ETFs and cryptocurrency and other exchange-traded commodities have also quickly become popular.
Accelerating inflows into ETFs on both sides of the Atlantic in 2021 led to white label platform HANetf recently reporting that its AUM passed US$2.5bn in April from US$1.1bn at the start of the year, boosted by the popularity of its bitcoin ETC product.
Under lockdown and with more time on their hands, many investors have also increased the time they spend trading shares, with a study from leveraged ETF operator GraniteShares finding that 12% of British investors during the Coronavirus crisis were trying to make it as day traders.