Citigroup’s ETF Market Outlook
Citigroup announced on Thursday that the assets managed in U.S. exchange-traded funds (ETFs) could potentially exceed $25 trillion by the decade’s end. This projection is driven by investors looking for low-cost, diverse market exposure in this increasingly favored asset class.
As of March 2025, the U.S.-listed ETF industry held approximately $10.4 trillion in total assets. Previous estimates from Wall Street brokerage firms had suggested that these assets might reach $19 trillion by 2030 and $29 trillion by 2035.
Interestingly, Goldman Sachs recently completed its acquisition of Innovator Capital, which has increased its ETF assets to around $90 billion.
The market is now anticipated to grow to over $40 trillion by 2035. While these projections are more optimistic compared to earlier forecasts, they indicate that the ETF sector is entering a more mature phase in terms of asset management growth.
Citi notes that current influences on growth have become more balanced between organic and performance-based factors than they were in the last decade. Much of this expansion is expected to come from active ETFs, which are predicted to outperform their passive counterparts.
Active ETFs, which represent one of the fastest-growing segments of the ETF market, appeal to investors due to their flexible strategies and lower costs. These funds are designed to either beat a benchmark or achieve specific investment outcomes, unlike passive ETFs that aim to mirror the performance of an index.
Citi projects that the market share of assets managed by active ETFs could double over the next ten years as these products capture larger portions of industry investments.
Several elements are believed to support this growth, including innovation in product offerings, relaxed regulations for launching ETFs, a shift toward more sophisticated strategies, and a rising demand for flexible and tax-efficient investment solutions.
This year so far, ETFs centered on U.S. stocks have welcomed over $75.8 billion in inflows, on top of an impressive $1.1 trillion over the past two years, as reported by LSEG Lipper. Additionally, U.S.-based ETFs have accumulated over $435 billion in inflows this year alone.
