2025 was a year with record inflows for the U.S. ETF industry.
These inflows occurred in a year in which global bond and equity markets were shaped by a combination of geopolitical instability, persistent fiscal pressures, and diverging monetary policy paths across major central banks. For U.S. investors, the market narrative was one of cautious optimism punctuated by episodes of volatility as macro‑economic fault lines became more visible.
Geopolitical forces continued to exert a dominant influence on market sentiment. Nevertheless, it looked like financial markets largely shrugged off the initial shock from new U.S. tariff announcements in April, even though underlying geopolitical and trade vulnerabilities remained elevated. Meanwhile, the intensifying U.S.–China tensions, sanctions, and structural divergences, weighed on both U.S. and Chinese growth while the U.S. maintained relative strength.
For international equity investors, this backdrop translated into a preference for domestically oriented sectors and high‑quality balance sheets, as export‑heavy industries faced lingering uncertainty. As a result, ETFs investing in U.S. equities witnessed strong estimated net flows. Supported by easing inflation and rising indices, the market sentiment across the major markets became more positive over the course of the year despite the somewhat weak economic momentum in key economies such as Germany and Italy and some geopolitical concerns.
More generally, equity markets witnessed a sector rotation as investors’ interest shifted from growth to value stocks. As a result, stocks from classic value sectors such as financials, energy, and industrials started to outperform high growth tech names. In addition to this, small and mid caps started to outperform large and mega caps over the course of the year.
Fiscal sustainability became a major theme influencing bond market performance. Widening government deficits were placing pressure on sovereign bond markets and raising the likelihood of yield increases as policymakers face growing challenges to maintain financial stability as market fragmentation and debt burdens were rising.
U.S. bond investors responded by demanding higher risk premia from fiscally vulnerable euro‑area members. Spreads widened at various points of the year, reflecting concerns around slow growth and budget slippage. In the U.S., repeated debates over government spending and shutdown risks contributed to periodic volatility in Treasuries, reinforcing global risk‑off sentiment during early year episodes.
The Federal Reserve reversed its policy to hold rates steady during its last three meetings for the year and cut the Fed fund rate by 25 basis points (bps) in each of those meetings, stating that the elevated economic uncertainty has led to concerns about rising unemployment due to the introduction of new tariffs and industrial policies by the U.S. government. The European Central Bank (ECB) cut its deposit facility rate also three times by 25 bps over the course of the year as the euro‑area inflation moved closer to target while economic growth stagnating in the euro area. Opposite to this, the Bank of Japan (BoJ) made a shift towards tighter monetary policies by raising interest rates to 0.75%, with two interest rate increases of 25 bps over the course of 2025. The 0.75% interest rate marks the highest interest rate over the course of the last 30 years in Japan.
Within this environment, gold has reasserted its role as investors’ preferred safe haven and as barometer of geopolitical risk, as the price of gold made an exceptional rally, gaining 65.2% over the course of the year as it reached $4,337.0 per ounce at the end of the year 2025. The rally of the silver price was even more impressive, as the price for an ounce of the second currency metal gained 150.1% over the course of the year. While the price for both precious metals was driven by economic and geopolitical uncertainties, the silver price was boosted by increasing industrial demand and a lack of supply.
Overall, it can be said that 2025 was a year of two halves, as the market sentiment on equity and bond markets was quite positive over the first half of the year, while the market sentiment was driven by uncertainty caused by renewed geopolitical, fiscal, and economic concerns.
From a U.S. ETF industry perspective, the performance of the underlying markets led, in combination with the estimated net flows, to increasing assets under management (from $10,373.3 bn as of December 31, 2024, to $13,475.2 bn at the end of December 2025). At a closer look, the increase in assets under management of $3,101.9 bn for 2025 was driven by the performance of the underlying markets (+$1,625.0 bn), while estimated net inflows added (+$1,476.9 bn) to the increase in assets under management.
Assets Under Management in the U.S. ETF Industry
The growth of the assets under management (AUM) in the U.S. ETF industry is the best proof of success for the U.S. ETF industry since its inception in 1992.
Graph 1: Assets Under Management in the U.S. ETF Industry, January 1, 1992 – December 31, 2025 (USD Billion)
Source: LSEG Lipper
As for the overall structure of the U.S. ETF industry, it was not surprising equity ETFs ($10,283.4 bn) held the majority of assets, followed by bond ETFs ($2,282.4 bn), alternatives ETFs ($534.2 bn), commodities ETFs ($339.6 bn), mixed-assets ETFs ($30.1 bn), and money market ETFs ($5.5 bn).
Given the volatile but positive market environment over the course of the year, it is no surprise that the overall assets under management in the U.S. ETF industry ($13,475.2 bn) hit a new all-time high at the end of the year. When it comes to this, it is noteworthy that the assets under management for all asset types, with the exception of alternatives and mixed assets, reached also a new all-time high at the end of the year.
Graph 2: Market Share, Assets Under Management in the U.S. ETF Industry by Asset Type, December 31, 2025
Source: LSEG Lipper
ETF Flows by Asset Type
The U.S. ETF industry saw strong inflows (+$1,476.9 bn) over the course of 2025. The flow pattern over the course of the year shows that the inflows into ETFs slowed down after the announcement of the U.S. tariffs in April, but returned even stronger, as the tariffs had not become a thread for economic growth during the following months.
Graph 3: Monthly Estimated Net Sales, January 1, 2025 – December 31, 2025 (USD Billions)
Source: LSEG Lipper
These impressive estimated net flows might be seen as proof that the acceptance and adoption of ETFs by U.S. investors has been further increased over the course of the year 2025.
The inflows in the U.S. ETF industry for 2025 were driven by equity ETFs (+$908.6 bn), followed by bond ETFs (+$423.3 bn), alternatives ETFs (+$74.4 bn), commodities ETFs (+$58.5 bn), mixed-assets ETFs (+$6.6 bn), and money market ETFs (+$5.5 bn).
Graph 4: Estimated Net Sales by Asset Type, December 2025 (USD Billions)
Source: LSEG Lipper
Given the market environment, it was no surprise to see high estimated net inflows into ETFs led by equity ETFs over the course of the year 2025.
Assets Under Management by Lipper Global Classifications
In order to examine the U.S. ETF markets in further detail, a review of the Lipper global classifications will lead to more insights on the structure and concentration of assets within the U.S. ETF industry. At the end of December 2025, the U.S. ETF market was split into 136 different peer groups. The highest assets under management at the end of December were held by funds classified as Equity U.S. ($5,761.9 bn), followed by Equity Global ex U.S. ($1,0475.5 bn), Equity U.S. Small & Mid Cap ($976.2 bn), Bond USD Medium Term ($578.4 bn), and Equity U.S. Income ($464.9 bn). These five peer groups accounted for 65.50% of the overall assets under management in the U.S. ETF segment, while the 10-top classifications by assets under management accounted for 77.46%.
Overall, 17 of the 136 peer groups each accounted for more than 1% of assets under management. In total, these 17 peer groups accounted for $11,632.3 bn, or 86.32%, of the overall assets under management.
Graph 5: Ten Largest Lipper Global Classifications by Assets Under Management, December 31, 2025 (USD Billions)
Source: LSEG Lipper
In addition, it was noteworthy that the rankings of the largest classifications saw some movement in single positions over the last few years. As the positions of the classifications had been quite stable in the past, this indicates that U.S. investors use ETFs to trade according to their market views. Even as some of these positions might be core holdings, once investors got into risk-off mode they also reduced their exposure to core asset classes.
Despite the fact that the rankings at the top of the league show some changes from time to time, these numbers show that the assets under management by Lipper global classifications continued to be highly concentrated in the U.S. ETF industry.
The peer groups on the other side of the table showed some funds in the U.S. ETF market are quite low in assets and their constituents may face the risk of being closed in the near future. They are obviously lacking investor interest and might, therefore, not be profitable for their respective fund promoters.
Graph 6: Ten Smallest Lipper Global Classifications by Assets Under Management, December 31, 2025 (USD Billions)
Source: LSEG Lipper
ETF Flows by Lipper Global Classifications
The net inflows of the 10 best-selling Lipper classifications accounted for $1,099.6 bn. In line with the overall sales trend for 2025, equity peer groups (+$725.8 bn) dominated the flows by asset type on the table of the 10 best-selling peer groups by estimated net inflows. That said, it was not surprising to see three bond classifications on the table of the 10 best-selling classifications for the year, given the general market sentiment. Given the overall fund flow trend in the U.S. ETF industry, it was not surprising that Equity U.S. (+$530.3 bn) was the best-selling Lipper global classification for 2025. It was followed by Equity Global ex U.S. (+$121.7 bn), Bond USD Medium Term (+$98.1 bn), Alternative Relative Value (+$71.4 bn), and Bond USD Government Short Term (+$64.1 bn).
Generally speaking, it is not surprising that Equity U.S. took the top spots on the table of the 10 best-selling Lipper classifications given the fact that U.S. investors seem to have a home bias, when it comes to investing on the capital markets. Nevertheless, the high inflows into Equity Global ex U.S. show that U.S. investors are diversifying their portfolios.
The still positive flows into cryptocurrencies (Alternative Crypto Currency +$37.2 bn) show that there is still interest in cryptocurrencies in the U.S. despite the negative performance of the bitcoin over the course of Q4 2025. This might be a sign for a rather institutional usage of crypto ETFs.
Graph 7: Ten Best- and Worst-Lipper Global Classifications by Estimated Net Sales, January 1 – December 31, 2025 (USD Billions)
Source: LSEG Lipper
More generally, these numbers showed the U.S. ETF segment is also highly concentrated when it comes to fund flows by classification. Generally speaking, one would expect the flows into ETFs to be concentrated since investors often use ETFs to implement their market views and short-term asset allocation decisions. These products are made and, therefore, are easy to use for these purposes.
On the other side of the table, the 10 peer groups with the highest estimated net outflows for 2025 accounted for $28.3 bn in outflows.
Equity Theme Natural Resources (-$10.4 bn) was the classification with the highest outflows for the year. It was bettered by Alternative Equity Leveraged (-$8.2 bn), Equity Sector Healthcare (-$1.9 bn), Equity China (-$1.8 bn), and Equity Sector Consumer Discretionary (-$1.7 bn).
Assets Under Management by Promoters
A closer look at assets under management by promoters in the U.S. ETF industry also showed high concentration, with only 121 of the 470 ETF promoters in the U.S. holding assets at or above $1.0 bn, accounting for $13,412.8 bn. The largest ETF promoter in the U.S.—iShares ($4,010.6 bn)—accounted for 29.76% of the overall assets under management. Despite a comfortable lead as largest ETF promoter globally, iShares is somewhat closely followed by Vanguard ($3,875.1 bn), the number-two ETF promoter in the U.S. That said, the two largest ETF promoters in the U.S. have a comfortable lead over the number-three promoter—State Street SPDR ($1,837.9 bn).
Graph 8: The 10 Largest ETF Promoters by Assets Under Management, December 31, 2025 (USD Billions)
Source: LSEG Lipper
The 10-top promoters accounted for 89.40% of the overall assets under management in the U.S. ETF industry. This meant, in turn, the other 470 fund promoters registering at least one ETF for sale in Europe accounted for only 10.60% of the overall assets under management.
ETF Flows by Promoters
Since the U.S. ETF market is highly concentrated when it comes to assets under management by promoter, it was not surprising that eight of the 10 largest promoters by assets under management were among the 10-top selling ETF promoters for the year 2025. Vanguard was the best-selling ETF promoter in the U.S. for the year (+$424.2 bn), ahead of iShares (+$373.1 bn) and State Street SPDR (+$88.7 bn).
Graph 9: Ten Best-Selling ETF Promoters, January 1 – December 31, 2025 (USD Billions)
Source: LSEG Lipper
The flows of the 10-top promoters accounted for estimated net inflows of $1,210.7 bn. As for the overall flow trend in 2025, it was clear that some of the 480 promoters (103) faced estimated net outflows (-$34.7 bn in total) over the course of the year.
Assets Under Management by ETFs
There were 4,878 instruments (primary share classes [4,809] and convenience share classes [66]) listed as ETFs registered for sales in the U.S. in the Lipper database at the end of December 2025. Regarding the overall market pattern, it was not surprising assets under management at the ETF level were also highly concentrated. Only 913 of the 4,809 ETFs (primary share classes = portfolios) held assets above $1.0 bn each. These ETFs accounted for $12,861.5 bn, or 95.45%, of the overall assets in the U.S. ETF industry. The 10 largest ETFs in Europe accounted for $4,155.2 bn, or 30.84%, of the overall assets under management.
Graph 10: The 10 Largest ETFs by Assets Under Management, December 31, 2025 (USD Billions)
Source: LSEG Lipper
Estimated Net Flows at ETF Level
A total of 3,604 of the 4,809 ETFs (primary share classes = portfolios) analyzed in this report showed net inflows of more than $10,000 each for the year 2025, accounting for inflows of $1,740.0 bn. This meant the other 1,205 instruments faced no flows, or net outflows, for the year. Upon closer inspection, 1,211 of the 3,604 ETFs posting net inflows enjoyed inflows of more than $100 m over the course of 2025—for a total of $1,683.8 bn. The best-selling ETF for 2025 in the U.S. was Vanguard 500 Index Fund; ETF, which enjoyed estimated net inflows of $143.6 bn. It was followed by iShares Core S&P 500 ETF (+$77.6 bn) and iShares 0-3 Month Treasury Bond ETF (+$39.0 bn).
Graph 11: The 10 Best-Selling ETFs, January 1 – December 31, 2025 (Euro Billions)
Source: LSEG Lipper
The flow pattern at the fund level indicated there was a lot of turnover and rotation during the year, but it also showed the concentration of the U.S. ETF industry even better than the statistics at the promoter or classification levels since the 10 best-selling ETFs account for inflows of $443.6 bn.
Given its size and the overall trend for net sales at the promoter level, it was somewhat surprising that only three of the 10 best-selling funds for 2025 were issued by iShares. These iShares ETFs accounted for estimated net inflows of $141.0 bn. Vanguard issued four of the 10 best-selling ETFs in the U.S. which accounted for estimated net inflows of $225.4 bn. This shows how Vanguard is closing the gap on the league table of the best-selling ETF promoters in the U.S.
The views expressed are the views of the author, not necessarily those of LSEG.
This article is for information purposes only and does not constitute any investment advice.
