The U.S. exchange-traded fund industry is on track to more than double its assets under management by the end of the decade, according to a new forecast from Citigroup. The firm's base case now projects U.S.-listed ETF assets will reach $25 trillion by 2030 and $42 trillion by 2035, up sharply from earlier estimates of $19 trillion and $29 trillion, respectively. As of March 2025, U.S. ETF assets stood at roughly $10.4 trillion, the report noted.
Drew Pettit, U.S. equity and ETF strategist at Citigroup, said the firm expects active ETFs' share of total ETF assets to more than double from 10% to 21% over the next decade. “Underlying the impressive industry growth story is the surge in active ETFs. We expect this tailwind to persist,” Pettit said. “Our base case expects active's market share of ETF AUM to double in ten years as these products gain greater share of industry flows.”
Active ETFs, which aim to outperform a benchmark or achieve specific outcomes rather than simply tracking an index, are among the fastest-growing segments of the ETF market. They have attracted investors with flexible strategies and relatively lower costs. Pettit and his team highlighted opportunities in niche strategy ETFs, core bond and equity portfolios, and specialized themes such as dividend investing.
The Citi outlook aligns with other industry research. A separate report by PwC, based on a survey of 72 executives, found that more than one-third of U.S. respondents expect U.S. ETF assets to more than double to $25 trillion or more by June 2030. Globally, 60% of those surveyed expect active ETF assets to more than double to at least $4 trillion by June 2030, up from $1.7 trillion at the end of 2025. Brown Brothers Harriman has even higher expectations, projecting active ETF assets could reach $10 trillion by 2033.
Defined outcome ETFs are also gaining traction. Research from Cerulli Associates in partnership with Innovator found that these products, which use options strategies to provide downside buffers in exchange for capped upside, could quadruple in assets to more than $334 billion by 2030. That represents a compound annual growth rate of 29% to 35%, far outpacing the broader ETF industry's expected 15% growth rate over the same period. “Traditional risk mitigation strategies offer diversification and stability, yet they often fall short on providing the certainty that clients increasingly seek,” said Daniil Shapiro, a director at Cerulli.
Other tailwinds for the broader ETF market include product innovation, more streamlined launch regulations, adoption of sophisticated strategies, and growing demand for tax-efficient investment vehicles. U.S. equity-focused ETFs alone have attracted more than $75.8 billion in inflows so far in 2026, building on more than $1.1 trillion in flows over the previous two years, according to LSEG Lipper data.
The growth in active ETFs comes as the industry sees a quiet slowdown in ETF launches, despite the overall bullish outlook. Meanwhile, the impending rollover wave of $4 trillion leaving 401(k) plans by 2030 could further boost ETF adoption as advisors seek tax-efficient and flexible investment vehicles for retirees.
