Citi Projects U.S. ETF Assets to Reach $25 Trillion by 2030, Active Funds Set to Double Share

Why It Matters

The anticipated doubling of U.S. ETF assets signals a fundamental reallocation of capital across the investment landscape, affecting everything from brokerage revenue models to retirement plan construction. A larger share of active ETFs means investors will increasingly rely on manager skill, raising the stakes for performance attribution and fee justification. For the broader financial ecosystem, the shift could accelerate the decline of open‑end mutual funds, reshape trading volumes on exchanges, and influence regulatory focus on ETF transparency and liquidity. Asset managers that can deliver compelling active strategies stand to capture a disproportionate share of the inflows, while those lagging may see their market relevance wane.

Key Takeaways

• Citi forecasts U.S. ETF assets to grow from $10.4 trillion (Mar 2025) to $25 trillion by 2030.
• Active ETFs expected to double their market share, rising from 10% to 21% of total ETF assets.
• $475 billion in active ETF inflows recorded in 2025, representing 32% of net new ETF money.
• Over 80% of new ETF launches in 2025 used active strategies; 84% of launches so far in 2026 are active.
• U.S. equity mutual funds lost about $34 billion in January 2026, highlighting the ETF migration.

Pulse Analysis

Citi’s bullish outlook reflects a broader industry consensus that ETFs have moved beyond a passive vehicle to become a versatile platform for active management. The rapid inflow into active ETFs suggests investors are seeking alpha in a low‑interest‑rate environment, despite higher fees. Historically, active funds have struggled to outperform benchmarks after costs, but the ETF wrapper offers tax efficiency and intraday liquidity that may tilt the cost‑benefit analysis in their favor.

The projection of $25 trillion in assets by 2030 also raises questions about market capacity. As ETF volumes swell, exchanges and clearing houses will need to ensure sufficient liquidity and robust market‑making mechanisms to prevent price dislocations. Regulators may intensify scrutiny on active ETF disclosures, especially around portfolio turnover and risk management, to protect retail investors who may not fully grasp the nuances of active strategies.

Looking forward, the decisive factor will be performance. If active ETFs can consistently deliver risk‑adjusted returns that justify their expense ratios, the sector could cement its place as a core component of diversified portfolios. Conversely, a series of underperforming launches could reignite the passive narrative and slow the asset‑growth trajectory. Asset managers, advisors, and investors should monitor quarterly flow data and performance metrics closely to gauge whether the active wave sustains its momentum.