Investors ploughed more than $100bn in new cash into exchange traded funds in January, a record monthly inflow that helped drive assets held in ETFs globally above the $5tn mark for the first time.

The surge in January follows four consecutive years of record breaking inflows into ETFs, a tectonic shift that is sending shockwaves across the entire asset management industry.

Rising disenchantment with the high fees and inconsistent performance of traditional mutual funds that try to pick winning stocks is encouraging investors worldwide to move into low-cost trackers that follow a broad index. This growing shift is forcing some asset managers to pursue acquisitions to defend their business models and is driving up closures of actively managed mutual funds.