US ETF AUM to surpass $25 trillion by 2030, says Citigroup

• US ETF AUM projected to reach $25 trillion by 2030 and $40 trillion by 2035, significantly higher than Citi's prior estimates of $19 trillion and $29 trillion respectively
• Active ETFs expected to outpace passive products in attracting capital, representing the fastest-growing segment with flexible strategies and lower costs
• Strong momentum continues with US-domiciled ETFs attracting over $435 billion in inflows year-to-date and equity ETFs recording $75.8 billion so far this year

US ETF Market Poised for Explosive Growth, Citi Says

Citigroup has significantly raised its forecast for US exchange-traded fund assets, projecting assets under management (AUM) will exceed $25 trillion by 2030, more than doubling from the current $10.4 trillion as of March 2025. The firm also expects ETF assets to surpass $40 trillion by 2035, up from its previous estimate of $29 trillion.

Key Growth Drivers

The upward revision reflects sustained investor preference for ETFs as low-cost, tax-efficient investment vehicles. Recent data shows robust momentum, with US equity ETFs attracting over $75.8 billion in inflows year-to-date and more than $1.1 trillion over the past two years. US-domiciled ETFs have gathered over $435 billion in flows so far this year.

Active ETFs Leading Expansion

Citi expects active ETFs to outpace passive products in attracting capital, representing the fastest-growing segment. Active ETFs offer flexible strategies and aim to outperform benchmarks while maintaining lower costs compared to traditional actively-managed funds, contrasting with passive ETFs that simply track indices.

Market Maturation

Despite the optimistic outlook, Citi notes the industry is entering a more mature growth phase. Future expansion will be driven by a balanced combination of new capital inflows and market performance, shifting from the previous decade's inflow-dominated growth pattern.

Supporting Factors

Structural tailwinds include ongoing product innovation, streamlined regulatory processes for ETF launches, adoption of sophisticated investment strategies, and increasing demand for flexible investment solutions.

The projections underscore growing confidence in ETFs' long-term trajectory as they cement their position as a cornerstone of modern investment portfolios.