U.S. exchange-traded funds crossed a major milestone in 2024, with assets climbing 28% to $10.36 trillion, driven by market appreciation and $1.12 trillion in net inflows, according to a new report from CFRA.
The record-breaking year signals a shift in how investors are accessing markets, with growth-oriented themes and active management strategies reshaping the traditionally index-dominated ETF landscape, according to Aniket Ullal, head of ETF research at CFRA.
The Hashdex Bitcoin Futures ETF (DEFI) led all categories with a 109.4% return in 2024, based on CFRA data.
Tech-focused funds also performed well, with the Roundhill Magnificent Seven ETF (MAGS) returning 62.7% and the Defiance Quantum ETF (QTUM) gaining 50.4%, the report showed.
Active ETF strategies captured 24.6% of total inflows in 2024, up from 14.6% in 2022, according to CFRA’s analysis.
The trend came largely at the expense of smart beta products, which saw inflows drop to 7.7% from 18.7% over the same period, the research found.
Vanguard and BlackRock maintained their industry dominance, capturing a combined 53% of all ETF inflows in 2024, according to the CFRA report.
The Vanguard S&P 500 ETF (VOO) attracted the most new assets with $115.1 billion in inflows, followed by the iShares Core S&P 500 ETF (IVV) with $86.5 billion, the report revealed. The iShares Bitcoin Trust (IBIT) captured third place with $37.5 billion in inflows during its first year of trading.
JPMorgan, meanwhile, showed growing influence in the active space, capturing 3.9% of total flows despite holding just 1.6% of assets at the start of 2024, the research revealed.
Active ETF issuers continued to gain market share throughout 2024, the report highlighted.
Dimensional Fund Advisors and Capital Group exemplified this trend, with both firms capturing more flows than their market share would suggest, according to the report.
The Global X MSCI Argentina ETF (ARGT) gained 61.6% in 2024, driven by investor optimism around Argentina President Javier Milei’s reform agenda, according to the research. The gaming sector also showed strength, with the VanEck Video Gaming and eSports ETF (ESPO) rounding out the top five performers.
Traditional indexed ETFs still maintained their appeal, with annual inflows growing 89% to $759.3 billion in 2024 from $402.4 billion in 2022, according to the data.
Looking ahead, CFRA projects 2025 ETF inflows between $500 billion and $1 trillion, with potential upside if the Securities and Exchange Commission approves ETFs as a mutual fund share class.