Breaking Trillions! US ETF is attracting money at "the fastest pace in history"

Every market upheaval this year - from the tariff panic in April to the tech stock pullback in September - has triggered the same knee-jerk reaction on Wall Street: increased buying of ETFs. This collective impulse has now driven the inflow of funds into U.S. ETFs to exceed $1 trillion, marking the fastest asset accumulation rate in the industry's history. Originally designed for diversified investments, financial instruments such as ETFs have now become the loudest declaration of confidence in the market, and are seen as the "pulse" of the bull market in 2025. The speed of fund inflows has broken all records in the industry's 30-year history, indicating that traders of all kinds have developed an instinctive positive attitude towards this tax-efficient investment tool. Just Vanguard's S&P 500 index-tracking ETF alone has attracted about $93 billion; and funds related to Bitcoin, gold, and leveraged trading have also attracted billions of dollars in inflows. The ETF structure, originally used for stable asset allocation, has now evolved into a real-time market sentiment barometer - serving as both the engine driving the current self-reinforcing uptrend and the resonance of that trend. Compiled data as of September shows that the momentum of fund inflows into ETFs this year has been remarkably strong, with monthly inflows about 3.5 times the usual seasonal average. Analysts predict that the full-year inflow of ETF funds in 2025 could reach around $1.25 trillion. "Whether it's Bitcoin, alternative assets, or the broader stock market, ETF fund flows always follow market trends," said Roxanna Islam, industry and sector research manager at ETF firm TMX VettaFi. "ETFs have become the preferred tool for investors, creating excellent conditions for the expansion of ETF industry assets." Meanwhile, investors continue to withdraw funds from mutual funds and favor ETFs - mainly due to the convenience of trading and tax efficiency that ETFs offer. Flood of New Fund Launches Fund inflows are not the only indicator that ETF industry is worth paying attention to: the number of new ETF launches in 2025 is also expected to reach a historical high. Compiled data shows that issuing institutions have launched over 800 new ETFs so far this year, exceeding last year's record. In September alone, more than 115 new ETFs were launched, setting a monthly issuance record. Analysts predict that if the pace of issuing 77 new ETFs per month in the fourth quarter can be maintained, the ETF industry will achieve the milestone of adding 1000 new ETFs in a single year for the first time. Issuers are taking advantage of various hot market trends to rapidly introduce leveraged ETFs and income-oriented funds. Data shows that nearly one-third of the newly issued ETFs this year contain leverage components. After two recent regulatory developments, analysts expect more ETFs to enter the market: the U.S. Securities and Exchange Commission (SEC) has indicated that it plans to allow Dimensional Fund Advisors - or other issuing institutions in the future - to launch ETFs as a share class of mutual funds; in addition, the SEC has also approved a rule revision allowing exchanges to offer a fast-track listing path for commodity ETFs (including ETFs related to specific cryptocurrencies). The approval of the "multiple share class" rule is expected to add thousands of new ETFs to the market and break down the barriers that have previously excluded ETFs from the U.S. retirement system. "The record pace of expansion in the ETF industry highlights its vitality and reflects the intense competition," ETF analyst Eric Balchunas said in a report. "As product saturation continues to increase, issuing institutions will increasingly need to differentiate themselves through lower costs and more innovative strategies."