When it comes to inflows, it seems like ETFs are content with beating themselves. After a record 2024 that saw inflows amass just under $1.14 trillion, ETFs did it again by edging past that level today. And they’re not done. State Street Investment Management is projecting total inflows could end the year at $1.4 trillion.
A toast is certainly in order. That’s especially so, given the number of headwinds blowing in the direction of the market heading into — as well as during — 2025. From a new presidential administration, tariffs, rate-cutting, geopolitical tensions, and other factors related to uncertainty, ETFs still managed to not only achieve $1 trillion in inflows for a second consecutive year, but outpace the previous year.
“After a record year for U.S. ETF flows in 2024, it was reasonable to think another record would be hard to achieve so quickly,” said TMX VettaFi’s Head of Research Todd Rosenbluth. “However, advisor and investors continued to embrace equity and fixed income ETFs, while alternatives such as gold and bitcoin gained traction. It is indeed an exciting time for the ETF industry and the future remains bright.”
As Rosenbluth mentioned, it’s been nothing short of a total team effort when pinpointing which areas of the ETF marketplace are responsible for the record year. A number of notable investment trends emerging during the year certainly contributed. Those include heavy demand for gold- and crypto-related ETFs, record actively managed fund launches, increased international asset allocation, a thematic resurgence, and heightened interest in other ETF sub-categories.
VOO Continues to Woo
Regarding the top draw in equity ETFs, Vanguard S&P 500 ETF (VOO) has been nothing short of elite. It crossed $100 billion in 2024 and did it again this year. It’s likely to hold that figure by the end of the year. That will make it two consecutive years of over $100 billion in inflows.
VOO is the ideal path to exposure when it comes to encompassing the S&P 500 in one ETF. With just 3 basis points in fees, it speaks to Vanguard’s foothold in the market as a low-cost, indexed fund provider.
Lovers of the SPDR S&P 500 ETF Trust (SPY) may have gotten salty when VOO surpassed it earlier this year to become the largest ETF. Whether VOO can stay in pole position in 2026 remains to be seen. But so far, it’s looking likely.
Fixated on Fixed Income
Equities can’t have all the fun. Fixed income ETFs have also been garnering record inflows this year. Investors have shown interest in various corners of the bond market. Most recently, fixed income ETFs took in a record $51 billion in October (their highest record ever) and over $350 billion overall this year, according to data from State Street.
“That is a sign of growing usage, despite flow totals being below that of equities,” said Matthew Bartolini, global head of research Strategists at State Street Investment Management.
From heavier demand for municipal bonds, short-term funds for cash needs, and other income ETF alternatives amid easing monetary policy, the demand for fixed income ETFs did more than its part in adding to the record flows. Increased interest in active fixed income also added more inflows, which will likely be a persisting trend heading into 2026.
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