On the Road to a $10 Trillion U.S. ETF Industry

Strong flows and performance are required to reach that lofty level.

sumit
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Senior ETF Analyst
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Reviewed by: etf.com Staff
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Edited by: Ron Day

As stock markets push higher, a major ETF industry milestone looms: $10 trillion in assets.

Will it be reached this year? While $9 trillion appears eminently doable, that next trillion will come in only if the right combination of performance and flows fall into place.

Assets under management in U.S.-listed ETFs hit a record $8.53 trillion last week, according to Bloomberg data, as the S&P 500 hovered near record highs. 

Investors have pushed $70 billion into exchange-traded funds so far this year. Still, most of 2024’s asset gains have come from price appreciation and not inflows: of this year’s $380 billion increase in AUM, $310 billion has come from ETFs increasing in price.

Around 61% of all U.S.-listed ETF assets are invested in domestic equity funds, so movements in the U.S. stock market play a big part in driving assets under management up and down.

Another 17% is invested in international equity ETFs, meaning that nearly 8 out of every 10 dollars in ETFs is invested in stocks.

Much of the remainder, or a fifth of the total, is invested in fixed income exchange-traded funds.

The Road to $10T 

At $8.53 trillion, ETF assets under management are around 18% short of the $10 trillion mark. To reach that lofty milestone this year, we would need to see a combination of surging markets and robust inflows. 

 Five years ago, AUM in U.S.-listed ETFs stood at only $3.5 trillion and now we’re on pace to reach triple those levels as soon as this year. The past two years have seen roughly $600 billion of annual inflows, while the year before that had a record $900 billion of inflows.

ETF AUM will probably surpass $9 trillion this year just based on new money coming into funds. Getting to $10 trillion this year would probably take some help from the markets.

If the U.S. stock market slides, all bets are off and $10 trillion almost certainly won’t happen in 2024. But if get a strong double digit rise in the S&P 500, then it starts to become feasible.

In any case, $10 trillion is just a matter of when, not if. And it’s a testament to the enormous growth that ETFs have seen over the past decade.

Sumit Roy is the senior ETF analyst for etf.com, where he has worked for 13 years. He creates a variety of content for the platform, including news articles, analysis pieces, videos and podcasts.

Before joining etf.com, Sumit was the managing editor and commodities analyst for Hard Assets Investor. In those roles, he was responsible for most of the operations of HAI, a website dedicated to education about commodities investing.

Though he still closely follows the commodities beat, Sumit covers a much broader assortment of topics for etf.com, with a particular focus on stock and bond exchange-traded funds.

He is the host of etf.com’s Talk ETFs, a popular video series that features weekly interviews with thought leaders in the ETF industry. Sumit is also co-host of Exchange Traded Fridays, etf.com’s weekly podcast series.

He lives in the San Francisco Bay Area, where he enjoys climbing the city’s steep hills, playing chess and snowboarding in Lake Tahoe.