ETFs have come on in leaps and bounds since the ETF rule arrived in 2019. Exchange-traded funds are taking a bigger and bigger role in the investment landscape, offering a different route into many strategies compared to mutual funds. State Street Investment Management research by Managing Director, Global Head of Research Strategists Matt Bartolini found that the ETF industry added $1.5 trillion for calendar year 2025, a record for the category.
See more: Income ETF PCEF Sees Index Rebalancing — What Changed?
State Street’s research found that $235 billion worth of flows in December helped carry the fourth quarter to more than half a trillion for the category, at $564 billion specifically. Much of those flows came in to reward stocks, bonds, and commodities for strong years. Per State Street Investment Management’s research, those categories saw their strongest “combined” performance since 2019, returning 21%, 8%, and 16% respectively.
ETFs Look to Repeat Record Year in 2026
According to that research, equity ETFs played a key role therein, adding $390 billion in just the last three months. Perhaps the most fascinating data point in the whole report, U.S. growth beat U.S. value by the most on record for a year. The former added $134 billion compared to $73 billion for value on the year.
That discrepancy highlights two interesting points. Despite much uncertainty and concerns about concentration risk, value saw its biggest gap in years, per the report. Secondly, by the same token, all of the negative headlines failed to stop growth stocks from delivering strong performance.
In the world of fixed income, meanwhile, bond ETFs took in almost half a trillion in net inflows for the year. Active bond ETFs made a big contribution therein, with $178 billion in net inflows. The tide of fixed income ETF flows even lifted inflation-linked bond ETFs into positive flow territory on the year, thanks to gold ETFs playing a big role.
With multiple records broken in recent years, ETFs are seeing some strong momentum. The new ETF share class of mutual funds and the continued tax-efficient appeal of ETFs could see the category produce another strong year in 2026.
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Originally published on ETF Trends
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