The surge, if sustained, could mark the second consecutive record year for exchange-traded funds (ETF) inflows|Scott Beale|CC BY-NC-ND 2.0
Despite the ongoing market volatility, trade tensions, and interest rate uncertainty, American investors haven’t backed away from exchange-traded funds (ETFs). They have invested a record $437 billion into ETFs so far in 2025.
The surge, if sustained, could mark the second consecutive record year for ETF inflows.
Vanguard’s S&P 500 ETF leads the pack, with $65 billion in net inflows till now, making it the world’s largest ETF.
In April, when market volatility hit a five-year high, Vanguard posted its highest-ever monthly inflows as investors shifted cash back into equities, showing how investors moved to ETFs this year.
The ETF boom is partly fueled by an ongoing exodus from mutual funds, as ETFs offer lower fees, real-time trading and tax efficiency.
Short-term Treasury ETFs, like BlackRock’s 0–3 month Treasury bond fund, also gained popularity, reflecting investor caution and the importance of cash. It has almost $17 billion in inflows. The cashlike fund has a 12-month trailing yield of 4.7%.
Active ETFs are booming, too—drawing 30% of this year’s inflows. JPMorgan’s income-focused active fund and Fidelity’s expanding lineup are tapping strong demand.
More mutual funds could soon switch to the ETF format if the Securities and Exchange Commission (SEC) approves new rules.