ETFs have surpassed US listed companies, with over 4,300 funds compared to just over 4,200 publicly traded businesses.
This might provide investors more options and reduced prices.
ETFs Outnumber US Stocks
According to recent data from Morningstar, the number of exchange-traded funds (ETFs) in the US securities market has surpassed the pool of individually listed stocks for the first time.
This has sparked a discussion about whether the expansion of investment options has reached an overabundance of options.
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On the other hand, a wealth of alternatives might make the market more confusing for investors and more competitive for participants.
Active ETFs Gain Popularity
ETFs now cover woke and anti-woke portfolios, pets, AI, and cannabis. In a news story, Bloomberg News cited Douglas Boneparth, President of Bone Fide Wealth, as saying, “It is difficult to determine if you are investing in something substantial for the long run or you are filling out an online quiz for Buzzfeed.”
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According to Bloomberg Intelligence statistics, active ETFs currently oversee over 10% of the $11.6 trillion US ETF market, up from less than 5% ten years ago due to skyrocketing demand.
US ETFs Surge Ahead
The US ETF count has doubled over the last eight years, in part due to the expansion of spot Bitcoin ETFs, which the US SEC approved in January 2024 and increased the ETF’s function as a Medium for cryptocurrency exposure. Up to 640 fresh launches have occurred only this year.
US ETF assets are projected to more than double from year 2020 levels.
By 2025, total assets are expected to reach $11.5–$12 trillion.
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US Dominates Global ETF Market
The US accounts for 69.8% of all worldwide exchange-traded product assets across all regions, according to an estimate from ETFGI research.
Gold and Bitcoin are among the top asset classes ETFs for the year, according to statistics from the Investment Company Institute, a worldwide body of the asset management industry.
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In a recent statement, the Securities Industry and Financial Markets Association (SIFMA Research), which keeps tabs on US debt issuances, said that while the US ETF market has seen substantial expansion, it is still modest in relation to other assets. According to a 2023 comparison, stocks were 6 times larger than ETFs and the fixed income market was 6.7 times larger.