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Citigroup has raised its growth outlook for the US exchange-traded fund (ETF) market, projecting that assets under management (AUM) could surpass $25 trillion by 2030.
The forecast points to strong inflow momentum and a growing preference among investors for cost-efficient investment vehicles. As of March 2025, total assets in US-listed ETFs were approximately $10.4 trillion, Citi said.
Citi previously forecast ETF AUM to reach $19 trillion by 2030 and $29 trillion by 2035. In its updated outlook, the firm now expects the ETF industry to surpass $40 trillion in assets by 2035.
While Citi’s updated projections are more optimistic than its prior estimates, the firm said the market is still likely to move into a more mature phase of AUM growth. Citi noted that the outlook implies that organic flow-driven growth and performance-driven growth will be more balanced than in the previous decade.
In other words, future expansion is expected to be driven not only by new capital inflows, but also by market performance—reflecting a shift from a period when inflows played a dominant role.
Citi expects a significant share of the anticipated growth to come from active ETFs, which it believes will attract investor capital faster than passive products.
The firm said active ETFs have emerged as one of the fastest-growing segments within the ETF market. It also highlighted that active ETFs offer flexible investment strategies and relatively lower costs, often aiming to outperform benchmarks or target specific investment outcomes. By contrast, passive ETFs typically track indices and replicate their performance.
Citi added: “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.”
Citi cited several structural factors that could support continued ETF market growth. These include ongoing product innovation, simplified regulatory processes for launching ETFs, and wider adoption of more sophisticated investment strategies.
The firm also pointed to rising demand for flexible and tax-efficient investment solutions as an additional contributor to sustained growth across the sector.
Recent inflow figures reinforce the strength of the ETF market. 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.
Separately, US-domiciled ETFs have attracted more than $435 billion in inflows year-to-date, reflecting continued investor demand for the asset class.
Overall, Citi’s revised projections reflect continued confidence in the long-term growth trajectory of ETFs, supported by changing investor preferences and structural shifts within the investment landscape.
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