The snooze button is getting a workout.

ETF issuers with big plans to expand their product lines, as well as the envelope of index investing, find themselves delaying launches for bold new funds such as highly leveraged strategies and ones similar to event contracts. There have been a record number of such exchange-traded fund filings this year with the Securities and Exchange Commission, and the regulator’s message to issuers has been: Not so fast. In response, companies pushed back the effective dates numerous times on products that, in some cases, may not see the light of day. Such has been the case for Volatility Shares, which has been preparing a range of ETFs with 3x and 5x leverage.

“The SEC has asked us, and all the other ETF issuers, to not let those filings go effective,” Volatility Shares CEO Justin Young told ETF Upside, noting that the agency “is quite adamant about issuers not launching those highly leveraged ETFs in the ’40 Act.”

Bettor Odds

Issuers are also sitting tight on gambling-style ETFs that would make all-or-nothing bets similar to event contracts. The SEC, which is considering how to treat such products and other novel ETFs, began collecting public comments just over a month ago and will do so through August. The agency appears to be more concerned with making the application process fair for issuers than forbidding gambling-style products, said Daniel Sotiroff, associate director of US passive strategies at Morningstar. “I don’t think it’s about restricting ETFs or concepts of ETFs that most people would consider to be risky or downright speculative,” he said. “I would not be surprised if they were to let some of these more novel things like prediction markets ETFs come onto exchanges and start trading.”

That issuers are pursuing more unusual and extreme flavors of funds is a consequence of the success of the ETF wrapper. Broad-market products, especially index-based funds, have won most of the assets, benefiting a handful of the biggest managers. Smaller and newer firms can’t expect to launch S&P 500 index ETFs and compete with the likes of iShares, Vanguard or State Street, so it’s natural that they would pursue unique strategies, Sotiroff said. “You’ve moved a step beyond what ETFs and stocks and bonds were meant to do,” he said. “You’re not gaining access to a company and its growth. You’re making a bet.”

But even the leveraged ETF niche is a difficult one for new funds:

• There have been close to 900 ETF launches so far this year, with many of those being single-stock funds, putting 2026 on track to easily break last year’s record.
• While less than two dozen leveraged or inverse ETFs bit the dust last year, more than 70 have closed so far this year, Sotiroff said.

If at First You Don’t 6c’d: Despite the pushback on highly leveraged funds, Young said the ETFs Volatility Shares filed comply with the SEC’s Rule 6c-11, which allows issuers to bring products to market without getting exemptions. There’s also a question of fairness, as a handful of 3x and inverse 3x ETFs already trade on US exchanges, he noted. For example, ProShares and Direxion have a number of funds that launched before the agency’s 2x leverage limit was adopted in 2020.

“You have a few issuers that just have dominated the best space,” Young said, pointing to a “monopoly” enabled by the SEC. “That’s the antithesis of what they should be doing. We’re quite frustrated that we haven’t been able to find a solution with them. And unfortunately, those conversations have been shut down.”

South Korean boy band sensation BTS’s return isn’t the only comeback story of the year.

Sustainable US funds just had their first quarter of inflows since the beginning of 2022, thanks to demand for energy and one exchange-traded fund in particular. Roughly $3 billion poured into US sustainable mutual funds and ETFs during April, May and June, or about as much as the First Trust Nasdaq Clean Edge Smart Grid Infrastructure Index ETF (GRID) raked in, according to a recent Morningstar report. To be clear, conventional funds without such sustainability marketing or mandates brought in more than 100 times the money. Still, it’s worth noting that not only has the overall bleeding from sustainable funds staunched, but it may be starting to reverse.

“This is a next-generation story as much as it is anything else,” said Peter Krull, director of sustainable investing at Earth Equity Advisors. “This is where the money is going to flow at some point in the near future … If you are a financial advisor and you don’t have a legitimate sustainable investment option, that next generation is going to go elsewhere.”

The Power of Infrastructure

The nearer-term story is about infrastructure, he said. That was evident from the wake of Hurricane Helene in 2024, which devastated Krull’s home of Asheville, North Carolina. Many residents didn’t have potable water for the better part of two months because of broken supply lines. And extensive damage to Interstate 40, which is still being repaired, cut off a supply chain corridor, causing serious economic harm, Krull noted. “We simply weren’t ready for a storm of that intensity.”

And the aging US power grid, stressed increasingly by electricity demands from artificial intelligence data centers, further highlights the needs to update the country’s infrastructure. That helps show why demand for GRID has recently outpaced other ETFs in the wider sustainability category:

• The fund has climbed nearly 15% this year, compared with a gain of about 9% for the S&P 500.
• It’s also part of a trend toward passive management in sustainable investing. Index ETFs in the category took in a net of $6.5 billion during the second quarter, compared with about $3.6 billion that flowed out of active strategies, per Morningstar’s report.
• Now, half of the $400 billion in sustainable US fund assets is in passives, putting index funds in the category on course to overtake actives for the first time.

Value vs. Values: More than 90% of investors globally said they were interested in sustainable investing, according to a Morgan Stanley survey earlier this year. Overwhelmingly, the top reasons are at least in part due to the potential for investment returns, with just 13% saying they would choose sustainable funds to align with their personal values. Clients “want portfolios that actually have solutions in them that are more well-thought-out than just, ‘Do I pick the company with the best ESG score in this particular sector,’” Krull said.

Corgi Funds is following in the footsteps of its furry namesake: it’s small, surprisingly fast and not afraid to take on the biggest dogs on the block.

The newcomer issuer has certainly been making waves in the asset management industry in recent months by standing up an unprecedented number of funds and filings. After introducing one fund in December, Corgi launched 187 exchange-traded funds this year, roughly one in five of some 882 total launches in the US during the same time, according to data from CFRA. Its parent company, the San Francisco-based Corgi Insurance, is a Y Combinator-backed artificial intelligence insurance start-up that was founded in 2024 and raised more than $268 million as of its Series B funding round in May.

As expected, the company has many of the attributes we’ve come to associate with Silicon Valley. It’s largely made up of people in their late 20s, and CEO Nico Laqua recently told Forbes he often sleeps in the “Founders’ Room” at the office where his team works seven days a week. The company has even opened 24/7 cafés à la Capital One where people can come up with their best ideas at all hours, even if it’s 2 a.m.

Many of the young workers at Corgi grew up investing in ETFs on platforms like Robinhood, said Edward Rumell, head of distribution at Corgi Funds, who joined the firm this year after roughly 18 years in the ETF industry. So after finding efficiencies and a way to launch a large family of low-cost ETFs, they jumped on the opportunity. “We feel like we’re doing a favor to the industry by coming out and launching low-cost funds,” Rumell told ETF Upside. “At the end of the day, we’re just trying to give another option.”

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