On this special episode of the “ETF of the Week” podcast, VettaFi’s Head of Research, Todd Rosenbluth, discussed record ETF inflows with Chuck Jaffe of Money Life. The pair discussed why this might be happening, highlighted some standout funds, and more.

Chuck Jaffe: One fund, on point for today. The expert to talk about it. Welcome to the ETF of the Week.

Yes, this is the ETF of the Week, where we examine trending, newsworthy, unique, and intriguing exchange-traded funds. And we do it with the help and guidance of Todd Rosenbluth. He’s the head of research at VettaFi, and at VettaFi.com, you’ll find all the tools you need to make yourself a savvier, smarter investor in ETFs.

But this is actually a special edition of the ETF of the Week, because we’re not going to just focus on one fund. We’re going to talk about some news that affects all ETFs — the entire ETF industry. And while we’re at it, we’ll cover a couple of funds in the process.

Todd Rosenbluth, it’s great to chat with you again!

Todd Rosenbluth: It’s great to be back!

Chuck Jaffe: Your news about the ETF industry is…

Todd Rosenbluth: $1.1 trillion and counting! That’s the amount of money that has gone into ETFs thus far this calendar year. We are just about to cross a record, and I’m super excited.

Chuck Jaffe: $1.1 trillion year-to-date, basically through Halloween day. Talk a little bit about the record, and talk about why you are super excited, because the numbers are meaningful here.

Todd Rosenbluth: Right. So, we crossed the trillion-dollar mark towards the end of last year. And so we ended with $1.12 trillion, according to the data that we get at VettaFi from FactSet. So we’re two months ahead of schedule, or almost two months ahead of schedule, for setting a record.

I had expected that we would have seen a bit of a slowdown in terms of ETF adoption coming into the year. We had a new presidential administration. I thought the market was going to be volatile. It was. It has been. But the market, being the equity market, has bounced back. We’ve already seen a record of flows for fixed income ETFs that happened about a month ago. It hasn’t slowed down. We’ve seen demand for international equities. We didn’t have that as part of the roadmap a year ago.

And gold and cryptocurrency [are]both accelerating together at the same time in terms of ETF adoption. There’s so much to be excited about in the ETF industry. And those numbers just show how more and more ETF investors are considering these products.

Chuck Jaffe: Let’s talk a little bit about how the numbers break down, because there have been a few stories for the market this year, whether it’s how well gold has done, how well international investing has done, what’s been going on with large-cap growth, all those other sorts of things that have kind of made the news, and the evolution of cryptocurrency funds and the rest. But in this rush of money coming in, what’s been the most popular?

Todd Rosenbluth: Well, so we talked about it last year, and I think we talked about it again this year. Vanguard 500 — the Vanguard S&P 500 ETF, VOO. It has already crossed $100 billion of net inflows. You know, Chuck, the only ETF to cross $100 billion was the Vanguard 500 ETF. It did it last year. So, it’s in a class of its own, repeating likely as the MVP of the ETF industry, in terms of asset gathering.

We’ve seen demand for other S&P 500 index-based products: SPYM, that’s the new ticker for the State Street low-cost S&P 500 ETF; IVV, that’s iShares S&P 500 ETF. Those three ETFs are at the top of the leaderboard.

But you’re right, we did see cryptocurrency — IBIT — be very popular this year. We’ve seen GLD, which is a State Street Gold ETF, be very popular this year.

And perhaps we’ll come back to it to dive a little deeper, but actively managed ETFs. I know I’ve talked about them a lot on this program. Well, almost 40% of the net flows this year has gone into actively managed ETFs. So this is not just an index-based world. The money certainly reflects that.

Chuck Jaffe: What is the trend there? Because obviously, we have seen a significant evolution in actively managed ETFs, because until a few years ago they weren’t really a thing, and they came in slowly. But as we’re talking about growth, more flow into ETFs, more that’s happening, have we seen that that share — not just the amount, but that the share of total inflows for active ETFs — is growing as well?

Todd Rosenbluth: Yes, it is. So, we’re now at a large enough critical mass of that. When you get roughly 40% of the flows, you’re now moving the overall asset needle. Nowhere near as strong. It’s over 10% of the overall assets. There’s still a lot of money that’s in index-based products. And when the S&P 500 continues to go up in value, then that asset base that’s tied to Vanguard 500 and the iShares product and the State Street product do well.

But what we’ve seen this year is that institutions, some of those that are running model portfolios for advisors, as well as individual investors, they’re embracing actively managed ETFs. So I know I’ve talked about DYNF beforehand. That’s an iShares Active Factor ETF that gathered more than $10 billion so far this year. I think we might have talked about the Janus Henderson CLO ETF, JAAA, that has been very popular with investors this year. So, it’s both been active equity and active fixed income that has been gathering assets.

Chuck Jaffe: There have been some new fund types introduced this year. In fact, you and I have talked about a number of them on ETF of the week, particularly when they involve options strategies, covered calls, things along those lines. How much traction have they gotten? I would not expect it to be significant among the $1.1-plus trillion in assets that we’ve seen this year, but is it significant in terms of they’re gaining a real foothold, or are they still kind of outliers and oddities?

Todd Rosenbluth: So, I don’t think there are outliers and oddities. In fact, I was just looking down to be able to see. So, JEPQ, that’s a J.P. Morgan Nasdaq Equity Premium ETF, that is close to $10 billion for the year. That’s leading the overall charge. But we’ve seen NEOS have a lot of success. I know I’ve talked about some of the NEOS individual ETFs. Those products have had success this year. We’ve seen covered call ETFs that are more narrowly focused as well.

So, I don’t have in front of me the percentage of assets or percent of flows that have gone into covered call ETFs. But we are seeing covered call ETFs have gained traction. That’s in part why, you know, we’re talking about them. We usually are coming to talk about the ETF of the Week, either because something was new and caught my eye and our team’s eye, or because the money has gone into it and we wanted to be able to raise the flag as to what’s happening. So, we’re seeing both of those happening within the covered call space.

Chuck Jaffe: As for the flows this year, I mean, obviously, ETFs keep taking a bigger share of money. So, you get some of that just as a natural migration. As people are saying, okay, I’m not putting more money into my traditional mutual funds or what have you. We’re seeing that flow into ETFs. But, are we also seeing people setting aside more money? Is it just like, where are all these new inflows coming from? It can’t all be traditional funds, can it?

Todd Rosenbluth: You’re right, it isn’t. And so we have seen net outflows from equity mutual funds, and some of that money is going into ETFs. But we’ve seen money, I believe, going into fixed income mutual funds at the same time that money is going into fixed income ETFs. So some of this is a market share shift from mutual funds to ETFs.

But it’s also just as people are investing in ETFs, they’re getting more comfortable in using ETFs as part of their overall practice, if they’re an advisor, or as an investor building a portfolio. And then they continue to put money to work, whether that’s a replacement from a mutual fund, a replacement from an individual stock to get the liquidity and the diversification benefits, or I’ve got more money to invest as an investor, I’m going to put that to work into ETFs.

And so that’s why I regret thinking that the market, that the ETF market, was going to slow down. I no longer believe that. I believe in 2026, we will again break $1 trillion of net inflows, because of how well we’ve done back-to-back years.

Chuck Jaffe: Because we’ve seen the market, we’re going to assume that the market is going to finish this year certainly in positive territory. It would take a lot to beat it out of that now, maybe up as much as 20%. It’s going to wind up being the third consecutive year of double-digit gains.

If the market takes a breather next year, not that a lot of people are already forecasting that or anything else, but if the market takes a setback, how much do inflows take a step back? Are you willing to hold to that forecast that the inflows will keep going, regardless of market conditions?

Todd Rosenbluth: Well, what’s the phrase? “Show me new facts and I’ll change my opinion.” So I guess let’s see what happens in 2026 and how, if the market sells off that much. But historically, what we’ve found is that when the market sells off, people turn to ETFs. Because if your position in a mutual fund is at a loss, you can sell that at a loss to get the tax benefits of doing so and moving into something that is cheaper.

So, for people who have been sitting on the gains the last three years, they’re probably less likely to sell out of something that’s working and then pay that tax consequence and move it into something perhaps cheaper, perhaps a more stable performer in the ETF world. But if the market sells off, that is likely an opportunity for ETFs to gain market share.

Will it be enough market share to generate $1 trillion of flows again? Sure. I’ll say that to you in early November of 2025 that I think that 2026 will have $1 trillion of net inflows. I hope to be back to talk more about it.

Chuck Jaffe: And I will hold you to it when you come back. But of course, you’ll be back plenty of times between now and then, because we’re doing the ETF of the Week, which means we’ll talk to you again next week. Todd, great stuff. See you then!

The ETF of the Week is a joint production of VettaFi and Money Life with Chuck Jaffe.

Yeah, I’m Chuck Jaffe. I’d love it if you check out my hour-long weekday podcast. You can find it on your favorite podcast app. Or you can go to MoneyLifeShow.com.

Now, if you want to get more information on your favorite ETFs, you want to see what’s trending, what’s going on, go to VettaFi.com for more information. They’ve got plenty of details there that will help you make yourself a better investor. They’re on Twitter at @Vetta_Fi. Todd Rosenbluth, their head of research, my guest here, he’s on X as well at @ToddRosenbluth.

The ETF of the Week is here for you every Thursday. Make sure you don’t miss an episode by following along on your favorite podcast app. And we will be back next Thursday with another ETF for you to consider. Until then, happy investing, everybody!

Editorial Note: As of publication, year-to-date inflows have now surpassed 2024’s previous record of $1.12 trillion.

For more news, information, and strategy, visit ETF Trends.

Note: This article was created in part through assistance from AI tools. The content has been thoroughly reviewed and edited by the author.