Since the start of September 2025, the ETF industry reflects a dynamic blend of enduring investor priorities and emerging themes reshaping the landscape. U.S. ETF assets have reached $12.5 trillion, with year-to-date net inflows of $784 billion, already outpacing the $593 billion gathered during the same time span in 2024.
The first three quarters of the year have seen accelerated adoption of new strategies, ongoing strength in traditional exposures, and a growing integration of crypto into investor portfolios. These developments highlight not only the diversification of investor preferences but also the adaptability of the ETF structure to meet modern needs.
DIY Investors Embrace Active and Complex Strategies
A defining theme of 2025 has been the growing adoption of active and complex ETFs among do-it-yourself (DIY) investors. Retail investors are increasingly moving beyond traditional passive exposures and into more specialized approaches such as defined-outcome buffers, leveraged products, and option-based income strategies. Option-based ETFs alone have attracted ~$62 billion in net inflows YTD, according to ETF Central.
The growth in active ETFs has been particularly notable. Assets in active products have doubled since 2023, and for the first time, the number of active ETFs in the U.S. has surpassed passive products, 2,322 active ETFs versus 2,117 passive ETFs as of August. Active ETFs now account for ~11% of total ETF assets under management, yet they have attracted nearly 60% of all net inflows so far this year. This marks a clear inflection point in the market and underscores the strong demand for strategies that offer greater flexibility, risk-management tools, and the potential for outperformance in today’s environment.
“The ETF investor of today looks very different from five years ago,” said Michael Venuto, Chief Investment Officer and Co-Founder of Tidal Financial Group. “We’re seeing greater sophistication among retail investors, who are using active and structured ETFs as tools for risk management and return enhancement.”
Institutional Commitment to Cheap Beta1
While innovation has surged in the retail space, institutional investors continue to favor low-cost core beta strategies. Vanguard’s S&P 500 ETF (VOO) has attracted significant inflows, outperforming SPDR’s S&P 500 ETF Trust (SPY) across several metrics, including AUM and flow this year.
Much of this shift is attributed to VOO’s lower expense ratio of 0.03% versus SPY’s 0.0945%, coupled with its strong liquidity and tighter tracking error, which make it particularly attractive for large-scale allocations.
The flow divergence has been consistent throughout the year, with VOO posting positive net inflows in every month of 2025, while SPY experienced redemptions in five of the first seven months.
Most notably, as of September 12th, 2025, VOO has brought in approximately $119 billion in new assets, while SPY has seen outflows of around $34 billion, a net difference of nearly $150 billion.
Crypto ETFs Cement Their Place
Perhaps the most transformational development in 2025 has been the growing normalization of crypto within the ETF ecosystem. As of September 12th 2025, net cumulative inflows into U.S. spot Bitcoin ETFs have reached ~$23 billion YTD. Spot Bitcoin ETFs, introduced last year after prolonged regulatory deliberation, have attracted billions in assets.
Notably, BlackRock’s iShares Bitcoin Trust (IBIT) became the fastest ETF ever to reach $70 billion in assets, hitting the milestone in just 341 trading days, a pace five times faster than the previous record set by SPDR Gold Shares (GLD).
Ethereum ETFs are also seeing a breakout moment. Spot Ethereum ETFs brought in nearly $10 billion in net inflows during July and August 2025 alone, by far the highest totals since their debut, reversing earlier outflows.
This success is paving the way for broader digital asset exposures to gain meaningful traction.
Star Strategists Enter the ETF Arena
The “celebrity analyst” ETF trend has accelerated in 2025, transforming passive investing into personality-driven portfolios.
Tom Lee’s Fundstrat Granny Shots U.S. Large Cap ETF (GRNY) has quickly become one of the fastest-growing equity ETFs on record. Since its November 2024 debut, GRNY surpassed $2.5 billion in AUM by Sept 12th, and reached the $2 billion mark in less than nine months. The Dan Ives AI Revolution ETF (IVES), launched in June 2025, and has already attracted over $650 million in assets. On the macro-resilience front, Ray Dalio’s SPDR Bridgewater All-Weather ETF (ALLW) brings his iconic risk-parity model to the ETF wrapper. Launched in March 2025 via State Street, ALLW has gathered more than $380 million in its first six months.
These funds draw on star power and storytelling to capture investor attention, yet they also raise important questions about sustainable performance, fee justification, and whether branding meaningfully enhances returns over the long term.
The Bigger Picture
What ties these trends together is the enduring appeal of the ETF structure itself: flexible, cost-effective, and adaptable to nearly any investment thesis.
Looking ahead, ongoing regulatory developments could reshape the competitive landscape, including the SEC’s review of ETF share class models, which could allow mutual funds and ETFs to coexist within the same product structure, and growing discussions around tokenized ETFs that could enable real-time settlement and fractional ownership on blockchain rails.
These potential shifts suggest that the pace of evolution in the ETF market will remain elevated. At Tidal Financial Group, we continue to see innovation not as an occasional disruption, but as the norm. Whether you’re planning a new launch, managing an existing fund, or exploring conversions, Tidal remains your partner for what’s next in the ETF space.
1: Beta represents an investment’s sensitivity to overall market movements, and ‘cheap beta’ refers to gaining broad market exposure at low cost, typically through passive index-based strategies
This material is for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any security. It should not be relied upon as investment advice, and it does not consider the investment objectives, financial situation, or particular needs of any individual investor. Investors should consult a financial professional before making any investment decisions.
Past performance is not indicative of future results, and there is no guarantee that concentrated strategies will outperform more diversified approaches. References to specific ETFs and providers are for illustrative purposes only and do not constitute an endorsement or recommendation.
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