The first nine months of 2025 was a period with strong estimated net inflows for the U.S. ETF industry. It also was not easy to navigate for investors since the announcement of possible tariffs by the U.S. president sent shockwaves through the stock markets around the world. As a result, investors around the globe acted nervous over any political and economic news, especially by the announcements around the new tariff regime by the U.S. president and potential tit-for-tat reactions from the markets which are the targets of the new tariffs. That said, the tariffs are seen as a kind of trade war between the U.S. and the rest of the world, especially China, by some market observers.
When it comes to equities, investors were concerned about the impact of any new tariffs on the growth expectations of literally all economies around the globe. In addition to this, investors were also concerned about the impact of new tariffs on the profitability of all kinds of companies, as well as the impact of tariffs on inflation around the globe. That said, the U.S. stock market showed the fastest recovery in history from its low reached on April 8, 2025, even as several companies couldn’t give investors any guidance on future earnings since the impact from possible tariffs is still unknown.
Additionally, the increasing tensions in the Middle East also impacted investor sentiment, especially the intensifying conflict between Israel and Iran, since this had the potential to become a broader conflict in the region and could drive up the price for oil. Despite these concerns, the swings in the price for oil during this conflict was more stable than investors had expected. This was because no oil production sites were hit by military actions in the region and the shipping route through the Strait of Hormuz stayed open.
Nevertheless, the war in Ukraine and the increasing number of conflicts around the world led to a defense spending spree in Europe. The respective announcements by governments over the course of the first five months of the year led to a bull market for defense-related stocks. Furthermore, the NATO member states agreed in September 2025 to increase their defense spending from 2.0% to 5.0% of their respective GDPs.
Meanwhile, central banks around the globe tried to adjust their policies to the current environment. While the European Central Bank (ECB) has further cut interest rates and reached its target rate of 2.0%, the same is somewhat true for the Bank of England, where the interest rate still stands at 4.25%, and Swiss National Bank, which has reached 0.0%. Conversely, the Bank of Japan (BoJ) had to increase its interest rates to 0.5%. The U.S. Federal Reserve left its interest rates (4.25% to 4.50%) unchanged over the course of the first six months of 2025 and started to lower its rates during Q3 2025. These decisions reflect central banks’ efforts to navigate economic challenges, including trade tensions, inflationary trends, and high market volatility, to support their local economies.
Nevertheless, fears of increasing debt in the U.S. put some pressure on the U.S. bond market, as investors fear increasing interest rates because of the increasing debt. That said, the downgrade of the U.S. by Moody’s on May 16, 2025, also contributed to these fears. When it comes to this, it is not surprising that the U.S. dollar has weakened against other major currencies despite the relatively high interest rate in the U.S.
More generally speaking, aside from the geopolitical tensions, there is only a very limited number of indicators which are sending negative signals for economic growth in the U.S. and other major economies around the world. With regard to this, it is noteworthy that most of these negative indicators are being offset by positive signals from other indicators. Nevertheless, some major economies lack economic growth and may need lower interest rates and/or increased government spending as stimulus. Despite these headwinds, the positive effects of lower interest rates seem to be more important for investors than the current state of some economies.
Assets Under Management in the U.S. ETF Industry
From an 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 a new all-time high of $12,719.5 bn at the end of September 2025). At a closer look, the increase in assets under management of $2,346.1 bn over the first nine months of 2025 was driven by the performance of the underlying markets (+$1,417.5 bn), while the estimated net inflows contributed $928.6 bn to the assets under management.
Graph 1: Assets Under Management in the U.S. ETF Industry, January 1, 1993 – September 30, 2025 (USD billions)
Source: LSEG Lipper
As for the overall structure of the U.S. ETF industry, it was not surprising equity ETFs ($9,695.7 bn) held the majority of assets, followed by bond ETFs ($2,145.3 bn), alternatives ETFs ($570.7 bn), commodities ETFs ($277.0 bn), mixed-assets ETFs ($27.0 bn), and money market ETFs ($3.7 bn).
It is noteworthy that all asset types, with the exception of mixed assets, reached new all-time highs for their assets under management at the end of Q3 2025.
Graph 2: Market Share, Assets Under Management in the U.S. ETF Industry by Asset Type, September 30, 2025
Source: LSEG Lipper
ETF Flows by Asset Type
The U.S. ETF industry enjoyed estimated net inflows (+$928.6 bn) over the course of the first nine months 2025.
The inflows in the U.S. ETF industry for 2025 so far were driven by equity ETFs (+$531.8 bn), followed by bond ETFs (+$296.0 bn), alternatives ETFs (+$52.6 bn), commodities ETFs (+$40.7 bn), mixed-assets ETFs (+$3.8 bn), and money market ETFs (+$3.7 bn).
Graph 3: Estimated Net Sales by Asset Type, January 1, 2025 – September 30, 2025 (USD billions)
Source: LSEG Lipper
In more detail, graph 4 shows that equity and bond ETFs both enjoyed inflows in each of the nine months of 2025 so far. It is remarkable that bond ETFs enjoyed higher inflows than equity ETFs over the course of May despite the uneasy mood in the bond markets. Nevertheless, the graph also shows that the flows in both asset types have somewhat slowed down during Q2 2025 and went back to “normal” over the course of Q3 2025.
Graph 4: Monthly Estimated Net Sales by Asset Type, January 1, 2025 – September 30, 2025 (USD billions)
Source: LSEG Lipper
This trend for the estimated net flows is not surprising given the uncertainty of the markets with regard to a possible new tariff regime which should initially be introduced at the beginning of April but has been delayed accommodating bilateral negotiations between the U.S. and their trading partners. With regard to this, it is still too early to make an assumption about the future fund flow trends in the U.S. ETF industry.
Assets Under Management by Lipper Global Classifications
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 September 2025, the U.S. ETF market was split into 142 different peer groups (Lipper Global Classifications). The highest assets under management at the end of September were held by funds classified as Equity U.S. ($5,408.1 bn), followed by Equity Global ex U.S. ($969.1 bn), Equity U.S. Small & Mid Cap ($947.4 bn), Bond USD Medium Term ($545.3 bn), and Equity U.S. Income ($447.5 bn). These five peer groups accounted for $8,317.4 bn, or 65.39%, of the overall assets under management in the U.S. ETF segment, while the 10-top classifications by assets under management accounted for $9,806.9 bn, or 77.10%.
Overall, 16 of the 142 peer groups each accounted for more than 1% of assets under management. In total, these 16 peer groups accounted for $10,853.9 bn, or 85.33%, of the overall assets under management.
In addition, these numbers show that U.S. investors have a strong home bias when it comes to their investments.
Graph 5: Ten-Top Lipper Global Classifications by Assets Under Management, September 30, 2025 (USD Billions)
Source: LSEG Lipper
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 risk 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, September 30, 2025 (USD Billions)
Source: LSEG Lipper
Estimated Net Flows by Lipper Global Classifications
The net inflows of the 10 Lipper global classifications with the highest estimated net inflows over the course of the year 2025 so far accounted for $711.7 bn. In line with the overall sales trend for the year 2025, equity peer groups (+$430.7 bn) gathered the majority of flows by asset type on the table of the 10 Lipper global classifications with the highest estimated net inflows. Given the overall fund flow trend in the U.S. ETF industry, it was not surprising that Equity U.S. (+$304.9 bn) was the best-selling Lipper global classification for the first nine months of 2025. It was followed by Equity Global ex US (+$77.3 bn) and Bond USD Medium Term (+$64.8 bn).
These numbers showed the U.S. ETF segment is also highly concentrated when it comes to fund flows by sector. 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.
Graph 7: Ten Best- and Worst-Lipper Global Classifications by Estimated Net Sales, January 1 – September 30, 2025 (USD Billions)
Source: LSEG Lipper
On the other side of the table, the 10 peer groups with the highest estimated net outflows for the first nine months of 2025 accounted for $41.5 bn in outflows.
Alternative Equity Leveraged (-$14.5 bn) was the Lipper Global Classification with the highest outflows for Q3 2025. The category was bettered by Equity Theme – Natural Resources (-$10.5 bn) and Equity Sector Healthcare (-$7.9 bn). It is surprising to see that ETFs classified as Equity Sector Gold & Precious Metals are on the list of the classifications with the highest outflows given the strong performance of gold and the respectively high inflows into the classification Commodity Precious Metals.
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 114 of the 449 ETF promoters covered in this report holding assets at or above $1.0 bn—accounting for $12,658.7 bn in assets under management. The largest ETF promoter in the U.S.—iShares ($3,814.8 bn)—accounted for 29.99% of the overall assets under management, ahead of the number-two promoter—Vanguard ($3,651.5 bn)—and the number-three promoter—SPDR ($1,732.8 bn).
Graph 8: Ten-Top ETF Promoters by Assets Under Management, September 30, 2025 (USD Billions)
Source: LSEG Lipper
The 10-top promoters accounted for 89.61% of the overall assets under management in the U.S. ETF industry. This meant, in turn, the other 439 fund promoters registering at least one ETF for sale in the U.S. accounted for only 10.39% of the overall assets under management. With regard to the concentration of the U.S. ETF industry by promoter, it is noteworthy that there were nine ETF promoters accounting for more than 1% of the overall assets under management each.
Please read our report: “U.S. ETF Industry – Review of the Concentration of Assets Under Management at the Promoter Level” for more information on the distribution of the assets under management at the promoter level.
Fund Flows by Promoters
Since the U.S. ETF market is highly concentrated with regard to the 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 first nine months of 2025. Vanguard was the best-selling ETF promoter in the U.S. for the year so far (+$257.5 bn), ahead of iShares (+$228.4 bn) and JPMorgan (+$45.9 bn).
Graph 9: Ten Best-Selling ETF Promoters, January 1 – September 30, 2025 (USD Billions)
Source: LSEG Lipper
The flows of the 10-top promoters accounted for estimated net inflows of $746.5 bn. As for the overall flow trend over the course of 2025, it was clear that some of the 449 promoters (105) faced estimated net outflows (-$27.2 bn in total) over the course of the first nine months of the year 2025.
Assets Under Management by ETFs
There were 4,561 instruments (primary share classes/portfolios [4,492] and [convenience] share classes [69]) listed as ETFs in the Lipper database at the end of September. Regarding the overall market pattern, it was not surprising assets under management at the ETF level were also highly concentrated. Only 872 of the 4,492 ETFs (primary share classes = portfolios) held assets above $1.0 bn each. These ETFs accounted for $12,132.9 bn, or 95.39%, of the overall assets in the U.S. ETF industry. The 10 largest ETFs in the U.S. accounted for $3,887.2 bn, or 30.56%, of the overall assets under management.
Graph 10: Ten Largest ETFs by Assets Under Management, September 30, 2025 (USD Billions)
Source: LSEG Lipper
Estimated Net Flows by ETFs
A total of 3,141 of the 4,492 primary share classes analyzed in this report showed net inflows of more than €10,000 each for the first nine months of 2025, accounting for inflows of $1,193.3 bn. This meant the other 1,351 instruments faced no flows or net outflows for the first nine months of the year. (When looking at these numbers one needs to bear in mind that some ETFs do not report their assets under management. This means Lipper can’t calculate fund flows for these ETFs). Upon closer inspection, only 996 of the 3,141 ETFs posting net inflows enjoyed inflows of more than $100 m over the course of 2025 so far—for a total of $1,145.8 bn. The best-selling ETF for 2025 so far was the Vanguard 500 Index Fund;ETF which enjoyed estimated net inflows of $84.7 bn. It was followed by iShares Core S&P 500 ETF (+$34.4 bn) and iShares 0-3 Month Month Treasury Bond ETF (+$28.2 bn).
Graph 11: Ten Best-Selling ETFs, January 1 – September 30, 2025 (USD Billions)
Source: LSEG Lipper
The flow pattern at the fund level indicated there was a lot of turnover and rotation during the first nine month of 2025, 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 $276.9 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 so far were promoted by iShares. These iShares ETFs accounted for estimated net inflows of $85.9 bn. With regard to the competition between iShares and Vanguard for the position as leading ETF promoter in the U.S., it is noteworthy that four of the 10 best-selling ETFs were promoted by Vanguard. These ETFs accounted for $136.7 bn in estimated net inflows. This shows that the competition between the leading ETF promoters in the U.S. is happening on the ETF level.
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.
