U.S.-Listed Exchange-Traded Funds (ETFs) now have more than half being of the active variety.

U.S.-Listed Exchange-Traded Funds (ETFs) now have more than half being of the active variety.

State Street's Midyear Review Highlights ETF Market Growth and Innovation

State Street Corporation has released its 2025 Global ETF Megatrends Midyear Review, showcasing the key trends shaping the expansion and innovation within the exchange-traded fund (ETF) market.

The report reveals that global ETF inflows reached an impressive $900 billion in the first half of 2025, marking a 25% increase over the same period last year. This substantial growth points to a structural transformation across various asset classes and geographies.

One of the significant trends highlighted in the report is the rise of active ETFs. In the US, active ETFs now account for 39% of ETF inflows, demonstrating a 73% global increase over the first half of 2024. This growth is driven by investor demand for sustainable and thematic ETFs, as well as fixed income and equity products.

Institutional investors are another key player in the ETF market, with a growing number adopting ETFs not just for short-term asset allocation, but as core portfolio holdings. This shift indicates a broader acceptance of ETFs as a long-term investment strategy.

State Street is at the forefront of this global innovation and expansion, having worked with 14 new ETF issuers in the first half of 2025 across various geographical regions. The corporation is supporting product launches across multiple continents, including the US, Europe, Australia, and Taiwan.

In addition to supporting numerous ETF launches, State Street is the servicing partner for approximately half of the more than 70 US investment managers filing for actively managed share class ETFs. The corporation also played a role in the launch of the first US Physical Carbon Credit ETF by COTwo.

Joerg Ambrosius, President of Investment Services at State Street, emphasised that clients are leading the charge in ETF innovation. He stated, "Our clients are creating ETFs in various regions, including Asia, North America, and Europe, and are using our global platform to help them innovate and scale."

The report identifies several megatrends that are now gaining momentum, but these specific trends are not disclosed in this paragraph. The continued growth and innovation in the ETF market promise exciting developments in the second half of 2025 and beyond.

1. The rise of technology is playing a significant role in the ETF market, as State Street Corporation is supporting product launches across multiple continents, including the US, Europe, Australia, and Taiwan, demonstrating the integration of technology in facilitating ETF innovation.
2. As finance evolves, so does investing, with the report revealing a 73% global increase in active ETFs over the first half of 2024, indicating that technology, particularly in the form of ETFs, is becoming an essential tool for long-term investment strategies by institutional investors.

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