Citi Outlook: Active ETF shares double in ten years, driving the US ETF assets towards a $25 trillion era by 2030.

According to the latest forward-looking report released by Citigroup, by the end of this decade, the assets under management in the US Exchange-Traded Funds (ETF) industry may more than double. The benchmark scenario prediction by this Wall Street investment bank estimates that by 2030, US ETF assets will reach $25 trillion, increasing to $42 trillion by 2035, significantly higher than the previously forecasted $19 trillion and $29 trillion. Citigroup data shows that as of March 2025, the scale of US-listed ETF assets was approximately $10.4 trillion. Drew Pettit, Citigroup's US Equity and ETF strategist, pointed out in the report that the bank expects the proportion of actively managed ETFs in the total ETF assets to double from 10% to 21% in the next decade. Pettit said, "The rise of actively managed ETFs is the core driving force behind the industry's remarkable growth. We expect this momentum to continue. In the benchmark scenario, as these products take a larger share of industry fund flows, the market share of actively managed ETFs in ETF assets under management will double in the next decade." Although the latest forecast is more optimistic than before, Citigroup also noted that the industry will enter a more mature growth stage, where the role between natural fund inflows and market performance will be more balanced than the past decade. Actively managed ETFs aim to outperform benchmarks or achieve specific investment goals rather than simply tracking indices, making it one of the fastest-growing areas in the ETF market. These ETFs attract investors with flexible strategies and relatively lower costs. Pettit and his team are particularly bullish on opportunities in niche strategy ETFs, core bond and equity portfolios, and specialty themes such as dividend investing. A report based on a survey of 72 executives released by PwC this year also echoes the above outlook. More than a third of US respondents expect US ETF assets to more than double by June 2030, reaching or exceeding $25 trillion. Globally, 60% of respondents expect that by June 2030, assets under actively managed ETFs will more than double from $1.7 trillion at the end of 2025, increasing to at least $4 trillion. Another report from Brown Brothers Harriman is even more optimistic, forecasting that assets under actively managed ETFs will grow to $10 trillion by 2033. At the time of Citigroup's release of the outlook, Target Outcome ETFs also showed their own growth momentum. A research collaboration between Cerulli Associates and Innovator found that Target Outcome ETFs, which use options strategies to provide downside protection while limiting upside potential, could quadruple in assets to over $334 billion by 2030, with a compound annual growth rate of 29% to 35%, far exceeding the 15% growth rate expected for the entire ETF industry during the same period. Daniil Shapiro, director at Cerulli, said, "While traditional risk mitigation strategies can provide diversification and stability, they often fail to meet customers' increasing demand for certainty." Other positive factors for the broader ETF market include product innovation, simplified issuance regulations, adoption of complex strategies, and growing demand in the market for tax-efficient investment tools. According to LSEG Lipper data, ETFs focusing solely on US stocks have attracted over $75.8 billion in inflows by 2026, with total inflows in the past two years exceeding $1.1 trillion.