U.S. 2025 ETF Recap: The Big Get Bigger

What You Need to Know:

• U.S. ETFs accumulated total inflows of $1.48 trillion throughout the year, surpassing the prior full year record of $1.1 trillion by 34%.
• December broke single-month inflows records for the U.S. ETF market with $230 billion inflows. This was the first time ever for U.S. ETFs to see over $200 billion inflows in a single month.
• Equity ETFs in the U.S. saw a record $923 billion in inflows, with both passive and active funds hitting new highs. Equity ETFs remain the predominant segment in the U.S. ETF market, representing 63% of fund inflows and comprising 79% of total AUM.
• Although crypto assets underperformed, alternative ETFs saw record inflows of $54 billion.
• U.S. ETF launches also hit a record in 2025, with 1,110 new ETFs coming to market, surpassing the prior year's record of 739.
• U.S. ETF assets hit the $13 trillion milestone thanks to market gains and investors pouring money into ETFs across different asset classes.
• The top four issuers control 80% of all ETF AUM and are responsible for 65% of ETF inflows in 2025.

The ETF (exchange-traded fund) market in the U.S. continued its significant growth in 2025. In total, U.S. ETFs accumulated US$1.48 trillion inflows – the highest in history. The strong inflows are the result of strong markets, new product development and increasing adoption of ETFs among investors.

ETF Highlights

The record flows and launches were largely driven by passive equity ETFs, which greatly benefited from a backdrop of strong broad equity markets. A detailed recap of 2025 in U.S. ETFs is outlined below:

By The Numbers

In 2025, U.S. ETFs reported total net inflows of $1.48TN. Equity ETFs led with record-setting inflows of $923 billion, marking the highest in U.S. ETF history. Fixed income ETFs followed with $431 billion in total inflows. Commodity ETFs benefited from the rally in metals, attracting $58 billion, while alternative ETFs garnered $54 billion in inflows despite declines in crypto assets.

U.S. ETF Flows (Total: $1.48 trillion)

U.S. ETF Flows: Active Equity ETFs vs. Passive Equity ETFs

The ETFs

In 2025, the U.S. saw the launch of 1,110 new ETFs, representing a 50% year-over-year increase compared to the 739 introductions in 2024. Equity ETFs comprised the majority of these new products, totaling 797 launches, while fixed income, alternative, and mixed allocation ETFs accounted for 169, 97, and 38 launches, respectively. By the end of the year, the total number of U.S.-listed ETFs reached 4,806.

A Top-Heavy Market

The U.S. ETF market is dominated by a few major players. The two largest issuers hold 31% and 27% of total assets respectively. The top four issuers control 80% of all AUM and are responsible for 65% of ETF inflows in 2025.

Regulators Rule

Regulatory changes notably impacted the U.S. ETF industry last year. The SEC approved the ETF share class for mutual funds, paving the way for new ETFs based on existing mutual funds. The SEC also permitted spot crypto ETFs for various cryptocurrencies, including XRP, Solana, HBAR, LINK, Litecoin, and DOGE, marking a more favorable stance toward crypto. However, the SEC in December pushed back against highly leveraged ETFs filings, especially those with 3x, 4x, or 5x daily exposure to volatile assets such as individual stocks, cryptocurrencies, and sector indices. Despite expectations for leniency under new leadership, the agency is now limiting leverage to 2x for new filings to address systemic risk and protect retail investors from high volatility.

Passive Equity ETFs Lead

Last year, equity ETFs attracted $923 billion, making them the top asset class. In 2025, equity ETFs captured 63% of total U.S. ETF inflows, with passive ETFs bringing in $638 billion, or 43% of all ETF inflows.

Mutual funds in the U.S. Continued to Lose Ground to ETFs

Over the first eleven months of 2025, mutual funds experienced significant outflows totaling $551 billion (source: ICI), while ETFs attracted $1.24TN in inflows. The gap between them has also grown, rising from $890 billion in 2024 to $1.79TN, showing that fund investors are increasingly favoring ETFs.

Strong Performance of Active ETFs

While passive ETFs attracted higher overall fund flows than their active counterparts last year, active ETFs continued to build momentum with investors. Specifically, active ETFs saw inflows totaling $475 billion, representing 32% of all ETF inflows. Notably, active ETFs comprise just 11% of U.S. ETF market AUM, compared to 89% for passive ETFs. Additionally, over 80% of new ETFs introduced in 2025 were active, signaling growing interest in active investment strategies. This trend may persist in 2026, particularly with the approval of ETF share classes in the U.S.

Key Takeaways

In 2025, equity ETFs were the main contributors to U.S. ETF inflows, even as markets fluctuated. Most investments went into large-cap funds, supported by solid index results. Some investors continued to prefer active equity ETFs during uncertain times. For fixed income ETFs, aggregate bonds and municipal bonds achieved record annual inflows. Commodity ETFs experienced their best year, collecting $58 billion thanks to rising metal prices. Crypto ETFs stayed in demand, though their inflows in 2025 were lower compared to the surge seen in 2024 when spot Bitcoin ETFs debuted.

The U.S. ETF market enters 2026 on a strong footing, following a record-breaking 2025 where assets AUM reached approximately $13TN by year-end, driven by $1.48TN in net inflows, the highest annual number ever recorded. This growth reflects broad investor enthusiasm, with U.S. equity ETFs capturing over $900 billion of those inflows, though diversification into fixed income, commodities, and alternative ETFs accounted for the rest. Looking ahead, the ETF industry expects sustained inflows amid favorable economic conditions like sturdy GDP growth and moderate Fed rate cuts. However, this outlook may be tempered by challenges such as stretched valuations, policy uncertainties from a shifting global order, persistent inflation, and rising deficits, which could introduce volatility.