Citigroup has raised its growth outlook for the US ETF market, projecting that assets under management could surpass $25 trillion by 2030, up sharply from current levels of $10.4 trillion as of March 2025.
The forecast highlights strong inflow momentum and increasing investor preference for cost-efficient investment vehicles.
The upward revision reflects growing investor preference for ETFs as a low-cost and diversified investment vehicle across global markets.
As of March 2025, total assets in US-listed ETFs stood at approximately $10.4 trillion, Citi noted.
The brokerage had previously forecast ETF AUM to reach $19 trillion by 2030 and $29 trillion by 2035.
However, its updated outlook now anticipates the industry surpassing $40 trillion in assets by 2035.
Growth to enter a more balanced phase
Despite the more optimistic projections, Citi indicated that the ETF market is expected to enter a more mature phase of expansion in the coming years.
The firm stated, “While these projections are more optimistic than our prior estimates, it still suggests ETFs will be in a more mature phase of AUM growth as flows (organic) and performance (inorganic) drivers will be more balanced than the previous ten years.”
This suggests that future growth will be driven not only by new capital inflows but also by market performance, marking a shift from the earlier decade where inflows played a dominant role.
Active ETFs expected to lead expansion
A significant portion of the anticipated growth is expected to come from active ETFs, which Citi believes will outpace passive counterparts in attracting investor capital.
These products have emerged as one of the fastest-growing segments within the ETF market.
Active ETFs offer flexible investment strategies and relatively lower costs, often aiming to outperform benchmarks or achieve specific investment outcomes.
In contrast, passive ETFs typically track indices and replicate their performance.
Highlighting this trend, Citi stated, “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.”
Innovation and regulatory ease support industry
Citi also pointed to several structural factors that could further support ETF market expansion.
These include continued product innovation, simplified regulatory processes for launching ETFs, and the adoption of more sophisticated investment strategies.
Additionally, rising demand for flexible and tax-efficient investment solutions is expected to contribute to sustained growth across the sector.
Strong inflows signal continued investor interest
Recent inflow data underscores the strong momentum within the ETF industry.
ETFs tracking US equities have recorded more than $75.8 billion in inflows so far this year, building on over $1.1 trillion in inflows accumulated over the past two years, according to LSEG Lipper data.
Meanwhile, US-domiciled ETFs have attracted more than $435 billion in inflows year-to-date, reflecting robust investor appetite for the asset class.
Overall, Citi’s revised projections signal continued confidence in the long-term growth trajectory of ETFs, driven by evolving investor preferences and structural shifts within the investment landscape
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