- Investments in US-listed ETFs are expected to top $2 trillion this year, a 40% jump over inflows in 2025, according to Goldman Sachs Global Banking & Markets.
- More than 35% of the inflow is in actively managed ETFs, which is a sign that institutional investors are increasingly using the funds for portfolio construction and management.
- The growth of thematic ETFs and third-party models is accelerating inflows into the market.
- Semiconductor ETFs recorded their largest aggregate month of inflows in June, with new investments of more than $19 billion.
Exchange-traded funds, or ETFs, have long been a popular way for investors to track the performance of indexes. Now, the unprecedented growth of more sophisticated funds is changing the structure of the ETF market
The rapid expansion of offerings is helping spark record inflows into ETFs. In the first half of 2026, investors poured more than $1 trillion into US-listed ETFs, propelling the market toward an expected all-time high of more than $2 trillion in new money for the full year, according to data gathered by Global Banking & Markets. That would be a 40% jump over 2025.
The trend demonstrates how the “ETF wrapper” is evolving into a product that does far more than passively track market indexes, says Tom Campbell, head of Americas ETF distribution in Goldman Sachs Global Banking & Markets.
“We’re now seeing some of the most advanced active management strategies in the markets expressed within the ETF wrapper,” Campbell says. “These range from levered funds to innovative fixed income offerings to structured derivatives.”
Institutional investors are increasingly using actively managed ETFs to outperform their underlying benchmark indexes and rebalance portfolios. More than 35% of the flow this year is going into active funds, which comprise roughly 13% of the $16.1 trillion in assets under management in US-listed ETFs.
“Active is really driving a lot of growth in the ETF market and it’s definitely noticeable on the trading desk,” says Jackson Isaacs, head of Americas equity ETF trading in Global Banking & Markets.
We spoke with Campbell and Isaacs about how investors are changing their use of ETFs, the growth of thematic funds, and the product’s role in the AI trade.
What’s behind this latest surge in ETF investments?
Tom Campbell:The velocity of product innovation is playing a key role in these record-setting flows. Last year, more than 1,100 new ETFs entered the market and now we’re on track to break that record by the end of 2026. We expect there will be more than 6,000 listed ETFs in the US. That surpasses the number of single stocks in the US market.
Keep in mind that a lot of the inflow is also for funds that have been in the market for some time. Increased trading volumes, intra-day liquidity, along with the ETF wrapper’s long-valued transparency and tax efficiency continue to make both prior and new launches attractive to investors.
Jackson Isaacs:There is this yearning from investors to get more customization in their portfolios. So we have seen this influx of new products from issuers which are, quite frankly, seeing what sticks. If an issuer develops a product around an investment theme and is the first to market, that can be very powerful. And there is a material level of adoption of these new products by different client segments, from individual retail investors to the world’s largest institutions.
You mentioned investment themes. How significant are those in driving inflows?
Jackson Isaacs: Market access and affordability have long been a major attraction of ETFs. So, too, is the ability to trade themes such as South Korean stocks or memory chips. Thematic ETFs have been available for some time. But again, what we’re seeing is increased adoption in the last couple of years as investors are attracted by the product’s listed equity format and its ease of use.
Tom Campbell: To Jackson’s point, we see institutional investors, including pension funds, around the world utilizing a broad dashboard of ETFs to build broader, multi-asset portfolios, and this trend is expanding at a rapid pace.
How else is the push for customized portfolios affecting ETF inflows?
Tom Campbell: In the last 12 months, we have seen ETF assets in what we call third-party model portfolios jump 46%, to $950 billion. This is significant because these offerings of ready-made portfolios have never been more popular with a rapidly expanding wealth and advisory segment. This has implications for wealth managers, registered investment advisors, plus investment firms. They also show how investors are using ETFs to fulfill multi-asset strategies instead of traditional securities.
Jackson Isaacs: I would add that rebalancing these portfolios is becoming an increasingly large part of trading activity. This is a dynamic we are watching with an eye on providing liquidity solutions as these model portfolios grow.
Speaking of trading activity, there has been considerable momentum around artificial intelligence (AI) this year. What are you seeing in terms of ETF trading flows?
Jackson Isaacs:We can see the velocity accelerate in two tech sectors: semiconductors and software.Semiconductor ETFs recorded their largest aggregate month of inflows in June—more than $19 billion. Conversely, software ETFs recorded outflows of roughly $1.9 billion, which was one of the largest monthly redemptions since 2018.
This shows how investors are using ETFs to manage and smooth volatility and lean on authorized participants, or APs, to scale liquidity across their portfolios. In broader terms, our trading volumes are running 50% higher than 2025, which was already a record year.
Tom Campbell: The ETF industry is averaging roughly $320 billion in notional trading volume per day. I would add that in times of market stress, ETFs are accounting for 40% of the tape at times. We see this in our trading. Investors are clearly gravitating to these products from a hedging and rebalancing standpoint, and this is strongest during times of heightened volatility. Investors are continually leaning into ETFs.
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