The U.S. ETF industry’s evolution has accelerated in 2025, surpassing last year’s record inflows and highlighting clear segmentation by pricing. While low-cost ETFs continue to dominate overall assets, active and derivatives based products are driving growth in the medium- and high-cost tiers. CFRA’s proprietary research explores how these shifts are reshaping the competitive landscape for issuers and investors alike.
ETF & Mutual Fund, Research
U.S. ETF Industry Evolving into Distinct Price-Based Segments as 2025 Flows Beat Annual Record
The U.S. ETF market continues to expand rapidly, developing distinct cost-based tiers that are shaping product innovation, competition, and investor choice.
Key Insights
- The ETF industry is now segmented by cost: low (0%–0.25%), medium (0.26%–0.75%), and high (>0.75%).
- Low-cost ETFs remain anchored in traditional beta strategies led by the “Big 3” issuers—Vanguard, BlackRock, and State Street.
- Active management is gaining ground in the medium- cost segments.
- Leveraged, inverse, and buffer ETFs dominate the high-cost top tier, reflecting investor appetite for tactical and options-based strategies.
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