Exchange-traded funds, or ETFs, have long been a popular way for investors to track the performance of indexes. Now, the unprecedented growth of more sophisticated funds is changing the structure of the ETF market, according to Goldman Sachs Global Banking & Markets.
The rapid expansion of offerings is helping spark record inflows into ETFs. In the first half of 2026, investors poured more than $1 trillion into US-listed ETFs, propelling the market toward an expected all-time high of more than $2 trillion in new money for the full year, according to data gathered by Global Banking & Markets. That would be a 40% jump over 2025.
The trend demonstrates how the “ETF wrapper” is evolving into a product that does far more than passively track market indexes, says Tom Campbell, head of Americas ETF distribution in Goldman Sachs Global Banking & Markets.
“We’re now seeing some of the most advanced active management strategies in the markets expressed within the ETF wrapper,” Campbell says. “These range from levered funds to innovative fixed income offerings to structured derivatives.”
Institutional investors are increasingly using actively managed ETFs to outperform their underlying benchmark indexes and rebalance portfolios. More than 35% of the flow this year is going into active funds, which comprise roughly 13% of the $16.1 trillion in assets under management in US-listed ETFs.
“Active is really driving a lot of growth in the ETF market and it’s definitely noticeable on the trading desk,” says Jackson Isaacs, head of Americas equity ETF trading in Global Banking & Markets.
We spoke with Campbell and Isaacs about how investors are changing their use of ETFs, the growth of thematic funds, and the product’s role in the AI trade.
What’s behind this latest surge in ETF investments?
Tom Campbell: The velocity of product innovation is playing a key role in these record-setting flows. Last year, more than 1,100 new ETFs entered the market and now we’re on track to break that record by the end of 2026. We expect there will be more than 6,000 listed ETFs in the US. That surpasses the number of single stocks in the US market.
Keep in mind that a lot of the inflow is also for funds that have been in the market for some time. Increased trading volumes, intra-day liquidity, along with the ETF wrapper’s long-valued transparency and tax efficiency continue to make both prior and new launches attractive to investors.
Jackson Isaacs: There is this yearning from investors to get more customization in their portfolios. So we have seen this influx of new products from issuers which are, quite frankly, seeing what sticks. If an issuer develops a product around an investment theme and is the first to market, that can be very powerful. And there is a material level of adoption of these new products by different client segments, from individual retail investors to the world’s largest institutions.
You mentioned investment themes. How significant are those in driving inflows?
Jackson Isaacs: Market access and affordability have long been a major attraction of ETFs. So, too, is the ability to trade themes such as South Korean stocks or memory chips. Thematic ETFs have been available for some time. But again, what we’re seeing is increased adoption in the last couple of years as investors are attracted by the product’s listed equity format and its ease of use.
Tom Campbell: To Jackson’s point, we see institutional investors, including pension funds, around the world utilizing a broad dashboard of ETFs to build broader, multi-asset portfolios, and this trend is expanding at a rapid pace.
