Institutional Investors have turned to exchange-traded Funds (ETFs) at a rapid rate, with global ETF inflows reaching $900bn (£665bn) in the first half of 2025– a 25% increase over the same period last year
State Street’s 2025 Global ETF Megatrends Midyear Review also highlighted that it has tracked some “megatrends” identified earlier this year that are now gaining momentum.
These include, one, active ETFs now accounting for 39% of US ETF inflows, two, global active ETF inflows reached $267bn in the first half of 2025 – a 73% increase over H1 2024, and three, active ETFs now represent more than 50% of all US-listed ETF in the US.
“ETF innovation is no longer regional – it’s global,” said Frank Koudelka, global head of ETF Solutions at State Street. “We’re seeing synchronised momentum across continents,” and also seeing “new strategies [brought] to market faster than ever before,” added Koudelka.
This picture also gives substance to a trend highlighted by Carne Group recently that showed a big majority – 82% – of institutional investors, think that ETFs are moving away from short-term asset allocation strategies to more a core portfolio holding approach.
This research also revealed that investors are using active ETFs to access new asset classes.
To highlight this point, as one-quarter of respondents said they invested in crypto for the first time following much innovation in the ETF market.
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