2025 ETF Flow Highlights
- International exchange-traded funds (ETFs) shattered previous inflow records, more than doubling in 2024 due to stronger returns and a weaker U.S. dollar spurring demand.
- Vanguard and iShares once again led the charge, capturing 54% of the total U.S. ETF net flows.
- The Vanguard S&P 500 ETF, known as VOO, set a new record for ETF inflows in 2025, reeling in $143 billion—roughly 10% of all new U.S. ETF investments.
- Increased gold prices sparked significant interest, resulting in a rebound for commodity ETFs after a lackluster prior year.
- Active ETFs enjoyed their most successful year to date, bringing in about a third of total inflows.
In 2025, ETFs amassed $1.46 trillion, surpassing the previous year’s record by $350 billion. This robust performance in the market coincided with heightened investor interest in ETFs.
Most analyst-rated ETFs outperformed their historical averages through 2025, particularly international ETFs, which performed exceptionally well. However, small- and mid-cap ETFs lagged behind their historical averages, as large-cap tech stocks largely influenced U.S. market performance in 2025.
Fat Cats and Starving Dogs
The giants of the ETF space have only grown. Vanguard and iShares now account for 54% of all new U.S. ETF investments and have dominated the net flows for 16 of the last 17 years. The next 18 largest ETF providers took home about 33% of the 2025 flows, leaving the remaining 13% for others.
This year, over 100 new companies entered the ETF market for the first time, which is quite notable. Horizon Investments, based in Charlotte, garnered the most inflows among newcomers, raising over $1 billion through its Horizon Funds ETFs. Still, new entrants accounted for less than 1% of the total ETF investments.
A Small Number of ETFs Stole One-Fifth of ETF Flows in 2025
The Vanguard S&P 500 ETF, VOO, alone represented one-third of Vanguard’s $425 billion in assets for 2025. Its inflows of $143 billion set a new annual record. Essentially, about 10 cents of every dollar invested in U.S. ETFs went to VOO.
The iShares Core S&P 500 ETF, IVV, secured the next largest inflow, attracting $78 billion this year. Following closely were the iShares 0-3 Month Treasury ETF and Vanguard Total Stock Market ETF, each with around $39 billion in new capital. Together, these four ETFs comprised about 20% of total net flows for 2025.
Investors’ Favorite ETF Categories for 2025
International stock ETFs had a remarkable year, driven by a surge in overseas stocks and a weaker dollar, leading to substantial capital inflows. The Morningstar Division of International Equities realized more new capital in 2025 than any prior year and more than double that of 2024.
Most major Morningstar category groups saw heightened interest over 2024, except for U.S. equities, alternatives, and a few others. U.S. equity and alternatives faced about a 1% decline in investor interest in 2025, following strong flows last year.
Meanwhile, ETF flows in other categories plummeted from 2024 to 2025, even with the number of ETFs in those categories more than doubling due to the rise of single-stock leveraged and inverse ETFs. Surprisingly, over $12 billion remains invested in leveraged stock ETFs, the highest among Morningstar categories, while inverse stock ETFs attracted $8 billion.
Commodity ETF flows surged to $55 billion in 2025, a staggering increase compared to the prior year. Most of that money went toward gold and silver investments, coinciding with impressive returns—like SPDR Gold Shares, which yielded a noteworthy 64% in 2025. While this is positive for those holding gold, significant price hikes could raise concerns about potential risks ahead.
Active ETFs Solidify Their Footing
By mid-2025, the number of active ETFs is expected to outpace passive ones, and these active ETFs are gaining traction in terms of flows. The year marked a record for inflows, totaling $460 billion, comprising around one-third of all ETF investments—which is about $200 billion more than the previous peak in 2024.
JPMorgan attracted the highest inflows into active ETFs, drawing in $60 billion, with the JPMorgan Nasdaq Equity Premium Income ETF (JEPQ) alone contributing around $10 billion.
The leading active ETF players in the U.S.—including Dimensional, JPMorgan, Capital Group, First Trust, and American Century—represent about half of the active ETF market, which is somewhat less concentrated than the broader ETF market. There’s potential for ETFs as a share class to enable investors to convert mutual fund shares into ETFs, likely boosting the market share of active ETFs even further.
