Exchange-Traded Fund Market Size, Share, Trends by 2031

The exchange-traded fund market size is expected to grow from US$ 10.23 trillion in 2023 to US$ 26.45 trillion by 2031; it is anticipated to expand at a CAGR of 12.6% from 2023 to 2031. The growing popularity of bond exchange-traded fund is expected to offer high growth opportunities.

Exchange-Traded Fund Market Analysis

Exchange-traded funds constitute a small proportion of the total global financial market in both fixed-income and equities, ranging from 0.4%-3.0% of fixed-income assets and 4-15% of equities by region. The advantages of ETFs over mutual funds include lower costs, the prospect of tracking the performance of the entire market rather than investing in single stocks, and in theory better investment outcomes, as active fund managers tend to underperform the market. These benefits have led to a surge in the number of these funds worldwide, growing at an astonishing ~3,000% since 2003, and driving the exchange-traded fund market growth.

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Exchange-Traded Fund Market: Strategic Insights

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Exchange-Traded Fund

Industry Overview

• An exchange-traded fund is a kind of pooled investment security that can be purchased and sold much like an individual stock. The main difference between an exchange-traded fund and a mutual fund is that though a mutual fund is also a pooled investment, it trades only once a day after the market close.
• The first exchange-traded fund was the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 Index and is still a popular exchange-traded fund with investors and traders today.

Exchange-Traded Fund Market Drivers and Opportunities

Shift from Traditional Loaning to Exchange-Traded Fund to Drive the Exchange-Traded Fund Market

• Exchange-traded funds are renowned for their easy liquidity options. Liquidity is an indispensable aspect of investing, providing investors with straightforward buying and selling. Regarding exchange-traded funds, liquidity is of significant importance.
• Exchange-traded fund’s liquidity refers to the ease with which investors can trade or exchange these funds. These funds are considered multifaceted asset baskets. Therefore, the higher the liquidity of each underlying asset comprising an exchange-traded fund, the easier it will be to redeem the entire exchange-traded fund.
• Exchange-traded funds feature two liquidity components - underlying asset liquidity and exchange-traded fund liquidity. Due to their complex redemption/creation procedures, most exchange-traded funds measure their liquidity in reference to their underlying assets and may include bonds, stocks, gold, etc.

Exchange-Traded Fund

Market Report Segmentation Analysis

• Based on type, the exchange-traded fund market is segmented into commodity ETF, equity ETF, fixed Income ETF, real estate ETF, and others.
• The equity ETF segment is expected to hold a substantial exchange-traded fund market share in 2023. These are simple investment products that unite the elasticity of stock investment and the simplicity of equity mutual funds. Exchange-traded funds trade on the cash market of the stock exchange, similar to any other stock, and can be purchased and sold continuously at market prices. These are passive investment instruments, based on indices and invest in securities in the same ratio as the original index. Because of its index mirroring characteristic, there is full transparency on the holdings of an exchange-traded fund. Further due to its distinctive structure and creation mechanism, the exchange-traded funds have much lower expense ratios as compared to mutual funds. Such advantages are anticipated to boost the exchange-traded fund market growth.

Exchange-Traded Fund

Market Share Analysis By Geography

The scope of the exchange-traded fund market report is primarily divided into five regions - North America, Europe, Asia Pacific, Middle East & Africa, and South America. Asia Pacific (APAC) is experiencing rapid growth, but North America is anticipated to hold the largest exchange-traded fund market share. APAC’s significant economic development and growing interest in trading have presented substantial opportunities for exchange-traded funds to expand.

Exchange-Traded Fund

Exchange-Traded Fund Market Regional Insights

The regional trends and factors influencing the Exchange-Traded Fund Market throughout the forecast period have been thoroughly explained by the analysts at Insight Partners. This section also discusses Exchange-Traded Fund Market segments and geography across North America, Europe, Asia Pacific, Middle East and Africa, and South and Central America.

Exchange-Traded Fund Market Report Scope

Exchange-Traded Fund Market Players Density: Understanding Its Impact on Business Dynamics

The Exchange-Traded Fund Market market is growing rapidly, driven by increasing end-user demand due to factors such as evolving consumer preferences, technological advancements, and greater awareness of the product's benefits. As demand rises, businesses are expanding their offerings, innovating to meet consumer needs, and capitalizing on emerging trends, which further fuels market growth.

Market players density refers to the distribution of firms or companies operating within a particular market or industry. It indicates how many competitors (market players) are present in a given market space relative to its size or total market value.

Major Companies operating in the Exchange-Traded Fund Market are:

1. Allianz Group
2. BlackRock Inc
3. BNY Mellon Corporation
4. Fidelity Investments Inc
5. Goldman Sachs

Disclaimer: The companies listed above are not ranked in any particular order.

The "Exchange-Traded Fund Market Analysis" was carried out based on type and geography. In terms of type, the market is segmented into commodity ETF, equity ETF, fixed Income ETF, real estate ETF, and others. Based on geography, the market is segmented into North America, Europe, Asia Pacific, the Middle East & Africa, and South America.

Exchange-Traded Fund

Market News and Recent Developments

Companies adopt inorganic and organic strategies such as mergers and acquisitions in the exchange-traded fund market. A few recent key market developments are listed below:

 

• In March 2024, Asset manager VanEck announced the waiver of its sponsor fee for the VanEck Bitcoin Trust (HODL), which provides exposure to spot bitcoin, effective immediately. This adjustment demonstrates VanEck's commitment to delivering enhanced value to investors, including through competitive pricing. During the period starting March 12, 2024, and ending on March 31, 2025, the entire sponsor fee will be waived for the first US$ 1.5 billion of the Trust’s assets. If the Trust’s assets exceed US$ 1.5 billion prior to March 31, 2025, the fee on assets over US$ 1.5 billion will be 0.20%. All investors will incur the same sponsor fee, which is the weighted average of those fee rates. After March 31, 2025, the sponsor fee will be 0.20%.

[Source: VanEck, Company Website]

• In March 2024, digital asset manager Grayscale Investments on filed for a spin-off of its spot bitcoin exchange-traded fund, the Grayscale Bitcoin Trust (GBTC). The spin-off is part of a bid to offer investors lower-fee exposure to bitcoin. Grayscale filed to list shares of a new investment product, the Grayscale Bitcoin Mini Trust, which will receive a certain amount of bitcoin held by GBTC. In exchange, current GBTC shareholders will get stock in the Mini Trust.

[Source: Grayscale, Company Website] 

Exchange-Traded Fund

Market Report Coverage & Deliverables

The market report on “Exchange-Traded Fund Market Size and Forecast (2021–2031)”, provides a detailed analysis of the market covering below areas-

• Market size & forecast at global, regional, and country- level for all the key market segments covered under the scope.
• Market dynamics such as drivers, restraints, and key opportunities.
• Key future trends.
• Detailed PEST & SWOT analysis
• Global and regional market analysis covering key market trends, key players, regulations, and recent market developments.
• Industry landscape and competition analysis covering market concentration, heat map analysis, key players, recent developments.
• Detailed company profiles.