Citigroup published an updated forecast for the U.S. exchange-traded fund industry on Thursday, projecting that assets under management for U.S.-listed ETFs could rise to more than $25 trillion by 2030. The bank's revised outlook moves the industry from its current scale of roughly $10.4 trillion in AUM as of March 2025 toward what Citi describes as a materially larger market by the end of the decade.
The brokerage had earlier estimated that ETF AUM would reach $19 trillion by 2030 and $29 trillion by 2035. In its latest view, Citi still expects substantial expansion over the longer term and now projects industry AUM to exceed $40 trillion by 2035.
Citigroup characterized the new set of forecasts as more optimistic than its prior estimates but argued the change signals a maturing stage of AUM growth for ETFs. "While these projections are more optimistic than our prior estimates, it still suggests ETFs will be in a more mature phase of AUM growth as flows (organic) and performance (inorganic) drivers will be more balanced than the previous ten years," Citi said.
A significant portion of the expected increase in assets, the bank said, could come from active ETF strategies. Citi anticipates that investments into active ETFs will outpace those into passive funds, driven by what it describes as the faster expansion of the active segment. Active ETFs offer different approaches from passive products: many aim to outperform a benchmark or deliver a targeted investment outcome, while passive ETFs seek to track an index and mirror its returns.
"Our base case expects Active’s market share of ETF AUM to double in ten years as these products gain (a) greater share of industry flows," Citi said in a note on Thursday.
Beyond the rise of active strategies, the note identifies a cluster of supportive factors for ETF industry growth: product innovation, easier regulation around launching ETFs, wider adoption of more sophisticated strategies, and ongoing demand for flexible, tax-efficient investment vehicles.
Flow data from LSEG Lipper cited in the note show continuing investor interest in equity-focused ETFs. ETFs that track U.S. equities have recorded more than $75.8 billion of inflows so far this year, according to Lipper, adding to more than $1.1 trillion of inflows over the prior two years. In aggregate, U.S.-domiciled ETFs have seen in excess of $435 billion of inflows so far this year, Lipper data show.
The updated projections reflect Citi's view that future ETF industry growth will be supported by a blend of ongoing investor flows and performance-driven expansion, with active strategies playing an outsized role in changing the composition of industry AUM.
Context and implications
Citi's revised forecast suggests a multi-year transition in how investors allocate to ETFs, with implications for product sponsors, active managers and market infrastructure. If active ETFs capture the market share Citi expects, portfolio managers and product designers may shift capital and distribution efforts toward active wrappers and the more complex strategies that can be housed within them.
At the same time, the note ties industry expansion to easing of launch regulations and product innovation, indicating that changes in the regulatory environment and the pace of new product development will be important determinants of whether the forecast materializes.