Investment flows into Exchange-Traded Funds (ETFs) reach an unprecedented $900 billion, marking a new high in product launches.
In the dynamic world of finance, the first half of 2025 has seen a significant surge in the global Exchange-Traded Fund (ETF) market. With a 25% year-on-year increase, Global ETF inflows reached an impressive $900 billion, according to recent reports.
One of the key factors driving this growth is strong investor interest in diversifying beyond traditional market exposures. Non-traditional assets such as gold, commodities, inflation-linked bonds, defined outcome strategies, and digital assets collectively accounted for 16% of inflows, despite representing only 6% of assets. This trend reflects a growing desire among investors to diversify outside the US, with notable demand for non-US equities, particularly developed ex-US and emerging market ETFs.
The surge in active ETF launches is another significant factor contributing to the market's growth. In the first half of 2025, 396 new active ETFs were introduced, outpacing new mutual fund and passive ETF launches. This surge is driven by operational efficiency, regulatory flexibility, and strong investor demand for transparency and flexibility that ETFs provide. Active ETFs even captured over 10% of total ETF inflows in July 2025, setting monthly records.
State Street Corporation, a leading player in the ETF market, is positioned as a key facilitator in this growth. While specific support for new product launches and issuer additions in 2025 is not explicitly detailed, State Street Global Advisors (SSGA) is highlighted as a major steward of market inflows during this period. Their ability to help investors navigate a complex market environment and provide exposure to diverse, non-traditional assets suggests they play a significant role in new product adoption and issuer participation.
Frank Koudelka, global head of ETF Solutions at State Street, emphasised that ETF innovation is no longer regional, it's global. Joerg Ambrosius, president of Investment Services at State Street, further stated that clients are leading the charge in ETF innovation.
Retail investors also played a significant role in the growth of the market, with retail investors adding $82 billion to the lowest-cost S&P 500 ETFs in the period. This trend, combined with the growing popularity of active ETFs and the desire for diversification, suggests that the ETF market will continue to thrive in the coming months.
In summary, the first half of 2025 has seen a significant boom in the global ETF market, driven by investor appetite for diversification, non-traditional assets, and active management. State Street Corporation, with its global platform and expertise, is positioned as a key player supporting this market resiliency and expansion.
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