U.S. ETFs Set to Surge to $25 Trillion by Decade's End

Citigroup predicts that the assets under management for U.S. exchange-traded funds could more than double to $25 trillion by the end of the decade. The growth is anticipated to be driven by active ETFs which may surpass passive counterparts, supported by product innovation, easier regulations, and increasing demand.

Citigroup has announced predictions for a significant surge in U.S. exchange-traded funds (ETFs) assets under management, expecting them to more than double to $25 trillion by the end of this decade. The move is set to transform the investment landscape as more investors seek low-cost, diversified exposure across markets.

The brokerage firm had earlier estimated the industry's assets to reach $19 trillion by 2030 and $29 trillion by 2035. However, new projections suggest assets could climb over $40 trillion by 2035, signaling a mature phase in ETF growth due to balanced organic flows and inorganic performance drivers.

A notable contributor to this expansion is the growing interest in active ETFs, projected to double their market share in the next ten years. Active ETFs are attracting investors with flexible strategies and cost advantages over their passive counterparts. Other industry growth catalysts include innovative products, streamlined regulations, and demand for efficient investment solutions.

(With inputs from agencies.)