Year in Review: 2023 ETF Predictions Report Card

Now that we’ve had the annual debate over the best way to brine a turkey (salt and buttermilk for us) we know we’re near the end game of 2023. Per my usual tradition, that means I need to say a few words about exchange-traded fund (ETF) tax-loss harvesting and then offer a report card on my ETF predictions for 2023.

I must admit that this year has been a lot of fun from a blog-writing perspective. In case there was any doubt, readers are far more interested in Taylor Swift than anything related to ETF trading or liquidity. I enjoyed creating ETF analogies with summer gardening and Colorado football, only to watch various animals decimate my cucumbers and tomatoes and the Colorado Buffaloes subsequently lose seven of their next eight football games. The last thing I need is any sort of perception of an ETF blog jinx going into 2024.

But first, I need to grade the predictions I made for 2023 before I give some thought to 2024 predictions (coming soon).

Prediction #1: Active muni funds will be the active fixed income ETF story of the year

From last year’s column:

“I see the overall municipal bond ETF pie continuing to grow and active management increasing its share of that pie. I predict more than 20% of municipal bond ETF inflows in 2023 will be directed toward active funds.”

The numbers through October 31, 2023: All muni ETF inflows: $8.3 billion; active muni ETF inflows: $1.8 billion (22%).1