Mid-2025 is approaching, and exchange traded fund demand continues its robust growth. Last year was a landmark year for the ETF industry, with industry net inflows for the first time surpassing $1 trillion and one ETF exceeding $100 billion in net inflows. Many, myself included, doubted 2025 could top such achievements, especially with the S&P 500 less likely to deliver a third consecutive year of over 20% gains. My skepticism about the seemingly insatiable appetite for ETFs was clearly misplaced.
As of June 17, investors have already added approximately $510 billion to ETF coffers. Here are a few key observations as we enter the second half of the year. Exchange traded fund records are likely to be broken again.
The Unflashy ETF Giant That Just Keeps Getting Bigger
The Vanguard 500 ETF (VOO) consistently attracts new capital by offering low-cost, broad U.S. equity market exposure. While not flashy, its steady growth in 2025 is truly remarkable.
In mid-February 2025, VOO surpassed the SPDR S&P 500 ETF (SPY) to become the world’s largest ETF by assets, reaching $632 billion. Since then, VOO has continued to expand, approaching $700 billion. Our ETFDatabase shows VOO’s net inflows exceeding $80 billion, though we estimate over $10 billion of this is attributable to the index’s quarterly rebalance. We anticipate some net outflows for the exchange traded fund in the final days of June.
Nonetheless, VOO is on track to surpass the $116 billion net inflows record it set in 2024 when it won an industry award. What’s particularly impressive is that advisors and clients are investing in the Vanguard ETF even when the market isn’t consistently calm. VOO was up 2% for the year as of mid-June, despite experiencing a decline between February and April.
Though passively managed ETFs like VOO still dominate the industry, active ETFs are once again punching above their weight. Despite constituting only about 10% of U.S. ETF assets, active ETFs have captured 37% of net inflows by late June 2025, a significant increase from 26% in 2024 and 21% in 2023. Furthermore, according to JPMorgan, 94% of ETF launches in the first five months of 2025 were actively managed.
However, the JPMorgan Nasdaq Equity Premium Income (JEPQ) has emerged as the most popular active ETF in 2025. JEPQ garnered $7.2 billion by providing an appealingly low-risk 13% dividend yield and exposure to large-cap growth stocks.
Fed’s on Hold, But Fixed Income ETFs Are Not
As of mid-June, fixed income ETFs gathered $166 billion. This trajectory positions the industry to potentially surpass the record $303 billion in flows achieved in 2024. However, the macroeconomic backdrop in 2025 presents a different dynamic.
The Federal Reserve implemented three interest rate cuts in the latter half of 2024, yet no further reductions have occurred during the first half of 2025. Nevertheless, investors have demonstrated a preference for the relative stability offered by short-term, high-quality bonds. The iShares 0-3 Month Treasury Bond ETF (SGOV) and the SPDR Bloomberg 1-3 Month T-Bill ETF (BIL) emerged as the two most popular fixed income ETFs in 2025, collectively accumulating $27 billion in inflows.
With half the year still to go, it should be clear that the exchange traded fund revolution is far from over. Appetite for these versatile investment vehicles is insatiable. So much for my skepticism. It looks like we could be talking about new exchange traded fund records well into 2026.
