State Street Predicts Inflows Into US ETFs Hit $2.1 Trillion This Year

Like the astronauts on NASA’s Artemis II, the exchange-traded fund market is set to break records in 2026. 

That’s according to State Street’s most recent outlook, which estimates that there will be $2.1 trillion of inflows into US ETFs this year, up from $1.5 trillion last year. The firm also predicts that we’ll see the first fund to top $1 trillion, as well as some $750 billion flow into active ETFs in the US (a 50% jump). If you’ve been following the ETF market, it’s no surprise that another banner year is likely in the making. In 2025, US ETFs saw record launches, inflows and AUM as institutional investors and retail investors poured money into the tax-efficient, low-cost funds. As issuers build on that momentum, active ETFs remain the “global product center of gravity,” State Street authors wrote. 

Active to the Moon 

Jeff Sardinha, head of ETF solutions for North America at State Street, broke that $2.1 trillion prediction down by asset class for ETF Upside. He said we could see $750 billion move into passive equity, $350 billion-$375 billion into passive fixed income, another $350 billion-$375 billion in active fixed income, $425 billion for active equity and $50 billion-$75 billion for the remaining classes (crypto, metals, commodities, leveraged and inverse, and alternatives). 

Many ETFs have mutual funds to thank. Sardinha said mutual-fund-to-ETF conversions could contribute another $50 billion-$60 billion, and that he expects a significant portion of the organic inflows to active ETFs to come from active mutual funds. And what about the multiple share class structures, which allow strategies to be offered in both mutual funds and ETFs? 

• In early days, Sardinha said we could see smaller asset growth as ETF share classes are treated like new product launches. But once mutual-fund-to-ETF tax-free exchanges are “automated along the entire value chain,” we should see larger asset migration. 
• Bryan Armour, Morningstar’s director of ETF and passive strategies research for North America, said that about $8.5 billion of ETF net assets came from mutual funds at the start of the year, whether that be ETF conversions (roughly $8.4 billion) or assets moved to an ETF share class (about $67 million were attributable to DFA US Micro Cap ETF, the first ETF share class). 

“While meaningful, that is a drop in the bucket compared to the $560 billion of new investment in US ETFs so far,” Armour pointed out. 

Unchartered Territories: Investors ability to access structured products previously reserved for high-net-worth and institutional investors is another reason ETFs have boomed in popularity of late. State Street said multi-coin diversified crypto ETFs beyond Bitcoin and Ethereum, private market-style ETFs, pre-IPO exposure and auto-callable income strategies are some of the areas gaining momentum.