Citigroup Projects Massive ETF Growth by 2030

Citigroup anticipates a substantial increase in the total assets under management (AUM) for U.S. exchange-traded funds (ETFs), projecting they will more than double to over $25 trillion by the close of this decade. This optimistic forecast, released on Thursday, reflects the asset class's escalating popularity among investors.

Currently, the U.S.-listed ETF industry holds approximately $10.4 trillion in total assets as of March 2025, according to Citi data. The firm's updated projections represent a significant upward revision from previous estimates, which had forecast $19 trillion by 2030 and $29 trillion by 2035.

Revised Projections Signal Robust Expansion

The latest outlook from Citigroup now forecasts AUM to exceed $40 trillion by 2035, indicating a more mature phase of growth for the ETF market. This expansion will be driven by a balanced combination of organic inflows and inorganic performance gains.

These adjusted estimates highlight a dynamic assessment of the market, reinforcing expectations for ETFs' continued dominance in the investment landscape. The revised figures underscore the asset class's increasing appeal and its evolving role in investment portfolios.

Active ETFs Leading the Charge

A primary catalyst behind this anticipated growth is the increasing prominence of active ETFs. Citigroup expects investments in these actively managed funds to outpace those in their passive counterparts.

Active ETFs are rapidly gaining traction due to their flexible investment strategies and often lower expenses compared to traditional actively managed funds. Unlike passive ETFs, which track an index, active ETFs aim to outperform benchmarks or achieve specific investment objectives.

Citigroup's analysis suggests that the market share of active ETFs within total ETF AUM could double over the next ten years. This growth is expected as these products attract a greater proportion of industry flows, reflecting their growing appeal to investors.

Broader Market Catalysts

The expansion of the ETF industry is also supported by several other factors. These include the introduction of innovative products and simpler regulatory processes for launching new ETFs.

Furthermore, the adoption of more sophisticated investment approaches and a sustained demand for flexible and tax-efficient investment solutions contribute to this growth. Market dynamics increasingly favor active management strategies playing a more significant role.

Strong Inflows Bolster Confidence

Supporting this bullish outlook, data from LSEG Lipper indicates robust investor interest in ETFs this year. ETFs tracking U.S. equities have seen more than $75.8 billion in inflows so far this year, adding to over $1.1 trillion in inflows observed over the past two years.

Additionally, U.S.-domiciled ETFs have collectively received inflows exceeding $435 billion during the current year. These strong inflows underscore the asset class's ongoing appeal and its established position within investors' portfolios, demonstrating confidence in ETFs as an efficient and diversified investment vehicle.

Industry Consolidation and Future Outlook

The dynamic environment of the ETF market is further highlighted by industry consolidation, such as Goldman Sachs' recent acquisition of Innovator Capital. This move significantly boosted Goldman Sachs' ETF assets to $90 billion.

Such acquisitions signal the strategic importance of ETFs for major investment firms and are expected to continue driving the growth and evolution of the broader ETF market. The industry's continued appeal to investors is solidified by the efficiency, diversification, and cost-effectiveness that ETFs offer.