AI Summary
Key Takeaways
- Three New Lenses: ETF market share sliced by total assets, value traded, and product count — each telling a different story.
- U.S. Stocks Dominate Assets: Sizable international and fixed income exposures; commodities and crypto punch above their weight in trading.
- Not All Passive: Passive holds 87% of assets and 92% of liquidity, but active funds make up 49% of ETPs and ~47% of 2026 inflows.
- Levered ETFs Trade Hot: Just a sliver of assets, yet 13.4% of daily value traded and 44.5% of share volume — used as trading vehicles, not buy-and-hold.
- Exposure Over Size: Passive giants dominate the core, but crypto, active, and levered products lead at the edges.
Earlier this summer, we included a chart in our intern’s guide to exchange-traded funds (ETFs) that showed how ETF liquidity can be broken down. It highlighted the diversity of exposures now available in the ETF wrapper, from stocks and bonds to passive and active, as well as different portfolio leverage.
Chart 1: ETF liquidity can be measured in many ways
Today, we break that data down into three more ways. Instead of looking at share volumes, we look at market share by total assets, value traded and by the number of ETFs in each category.
Each tells a different story about what investors and traders like about ETFs.
Looking at ETF exposure by asset class
One of the great things about ETFs is that they let investors use stock markets to invest in far more than stocks. The chart below looks at asset allocation across the three new metrics.
Chart 2: U.S. ETF exposures by asset class – North American exposure dominates
The majority of assets in U.S. ETFs hold U.S. stocks.
However, there are sizable exposures to international stocks and fixed income. Drilling into liquidity, we see relatively more trading in commodities (gold) and cryptocurrencies (teal).
Interestingly, the number of products is more evenly spread across all categories, highlighting an incredible amount of choice across all categories. Specifically, there are a large number of alternatives ETFs, which includes the ETFs with options and target date funds.
Not all ETFs are index products
It’s a common myth that ETFs are all index funds. This data proves that’s not (entirely) true.
Chart 3: Passive ETPs win on total assets, but active strategies trade 10% of daily volumes
To be fair, passive management still dominates assets and liquidity, with 87% of assets and 92% of liquidity.
Things change at the fund count level. Active funds are 49% of all ETPs by count. Interestingly, ETFGI reports that active ETFs account for nearly half (47%) of fund inflows in 2026, with $529.96 billion in year-to-date net inflows.
Looking at ETF leverage
ETFs and futures could both be called “derivatives” as they represent a ticker that gets you exposure to something else.
Futures have always been levered, with expiry rolls, margin and potential margin calls all part of managing a futures position. The recent evolution of “Perps” has created similar leverage for investors. Some ETFs also provide leverage (although by rule, U.S. leverage has been capped at a much lower 2-times, typically).
Chart 4: Unlevered ETFs dominate assets and issuance, and are the majority of trading
Despite representing a fraction of assets, levered ETFs account for roughly 13.4% of daily value traded. Mathematically, that shows they are being used as trading vehicles and not held as long as other ETFs. Interestingly, levered ETFs account for a much higher 44.5% of daily share volume. That’s because many levered ETFs have low stock prices – making their share volumes higher for the same value traded.
So, what doesthis tell us?
For much of the ETF market, the giant passive index trackers do have outsized share.
But at the edges, the divergences are sharp. Levered products, crypto ETFs and active strategies each punch well above their weight in certain categories.
The question might not be how big the ETF market is — but which type of exposure you actually want to buy.
