Detlef Glow, Research Lead ETFs at LSEG Data & Analytics comments: “Equities were surprisingly the best-selling asset type for U.S. ETF investors, and it looks like those investors have bought the dip (or at least parts of the recovery) as Equity U.S. were the best-selling Lipper classification over the month. Most market observers are quite curious what has happened to the fund flows after the announcements of the new tariffs’ regime in the U.S. and the following market turmoil”.
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“There were some surprises underneath the headline numbers. From my point of view the biggest surprise was to witness that iShares faced overall outflows for the month, while their biggest competitor (Vanguard) enjoyed strong inflows. This means the gap between the largest and the second largest ETF promoter in the U.S. is closing further. As a result of this trend, we may witness a change of guards at the top of the industry regarding the highest assets under management, in the foreseeable future”.
Executive Summary
- ETF promoters in the U.S. enjoyed estimated net inflows (+$64.6 bn) for April 2025.
- Equity ETFs (+$42.0 bn) posted the highest estimated net inflows in the U.S. ETF industry for April.
- The best-selling Lipper global classification for April was Equity U.S. (+$34.5 bn), followed by Bond USD Government Short Term (+$19.6 bn) and Equity Global ex U.S. (+$9.2 bn).
- Vanguard was the best-selling ETF promoter in the U.S. for April (+$37.5 bn), ahead of Charles Schwab (+$13.0 bn) and Direxion (+$5.5 bn).
- The 10 best-selling ETFs gathered estimated net inflows of $58.9 bn for April.
- The best-selling ETF for April in the U.S. was Vanguard 500 Index Fund;ETF, which enjoyed estimated net inflows of $21.2 bn.
U.S. ETF Industry Review, April 2025
April 2025 was another month with healthy inflows for the U.S. ETF industry.
These inflows occurred in a volatile and negative market environment in which investors around the globe acted nervous over any political and economic news. Investor sentiment was especially impacted by the announcement of a new tariff regime by the U.S. president and potential tit-for-tat reactions from the markets which are the targets of the new tariffs. That said, the tariffs are seen as a kind of trade war between the U.S. and the rest of the world, especially China, by some market observers.
When it comes to this, investors were concerned about the impact of any new tariffs on the growth expectations of literally all economies around the globe. In addition to this, investors were also concerned about the impact of new tariffs on the profitability of all kinds of companies, as well as on the impact of tariffs on the inflation around the globe.
Meanwhile, central banks around the globe try to adjust their policies to the current environment. While the European Central Bank (ECB) has cut interest rates, it is expected that the U.S. Federal Reserve will leave its interest rates unchanged after the May meeting. These decisions reflect central banks’ efforts to navigate economic challenges, including trade tensions, inflationary trends, and the high market volatility, to support their local economies.
Nevertheless, fears of increasing debt in the U.S. and other major economies—which may lead to increasing interest rates—might be the driver for the estimated net outflows from bond ETFs, while the still somewhat inverted yield curves might, beside a flight to a safe haven, be the drivers for the inflows into money market ETFs.
That said, inverted yield curves and especially long-term inverted yield curves, are seen as an early indicator for a possible recession. That said, the new tariffs regime in the U.S. has the potential to cause a recession too. However, there is only a very limited number of indicators which are sending negative signals for economic growth in the U.S. and other major economies. With regard to this, it is noteworthy that most of these negative indicators are still being offset by positive signals from other indicators. But even as it looks like the yield curves are slowly normalizing, this does not mean that there is no recession possible in the major economies around the globe. This is especially true as some major economies, such as Germany, lack economic growth and may need lower interest rates as stimulus. Despite these headwinds, the positive effects of lower interest rates seem to be more important for investors than the current state of some economies.
From an ETF industry perspective, the performance of the underlying markets led, in combination with the estimated net flows, to increasing assets under management (from €10,431.2 bn as of March 31, 2025, to €10,484.2 bn at the end of April). At a closer look, the increase in assets under management of €53.0 bn for April was driven by the estimated net inflows (+€64.6 bn), while performance of the underlying markets deducted -€11.6 bn from the assets under management.
Assets Under Management by Asset Type
As for the overall structure of the U.S. ETF industry, it was not surprising equity ETFs ($8,165.4 bn) held the majority of assets, followed by bond ETFs ($1,926.4 bn), commodities ETFs ($214.0 bn), alternatives ETFs ($150.3 bn), mixed-assets ETFs ($27.8 bn), and money market ETFs ($0.3 bn).
With regard to the current market environment, it is surprising that the assets under management for bond, commodities, and money market ETFs marked an all-time high at the end of the month. These numbers show that the main headwinds for the assets under management are witnessed in the equity markets.
ETF Flows by Asset Type
The U.S. ETF industry enjoyed healthy estimated net inflows (+$64.6 bn) over the course of April despite the headwinds in the equity markets. These inflows drove the overall inflows in ETFs up to $372.4 bn for the year 2025 so far.
Despite the headwinds on the equity markets, the inflows in the U.S. ETF industry for April were driven by equity ETFs (+$42.0 bn), followed by bond ETFs (+$12.1 bn), alternatives ETFs (+$6.8 bn), commodities ETFs (+$3.7 bn), money market ETFs (+$0.04 bn), while mixed-assets (-$0.1 bn) faced outflows.
The strong inflows into equity ETFs might be a sign that U.S. investors bought into equities during the market turmoil, to participate from a possible V-shape market recovery.
Assets Under Management by Lipper Global Classifications
In order to examine the U.S. ETF markets in further detail, a review of the Lipper global classifications will lead to more insights on the structure and concentration of assets within the U.S. ETF industry. At the end of April 2025, the U.S. ETF market was split into 139 different peer groups. The highest assets under management at the end of April were held by funds classified as Equity U.S. ($4,365.8 bn), followed by Equity Global ex U.S. ($812.9 bn), Equity U.S. Small & Mid Cap ($798.0 bn), Bond USD Medium Term ($492.3 bn), and Equity U.S. Income ($391.1 bn). These five peer groups accounted for 65.43% of the overall assets under management in the U.S. ETF segment, while the 10-top classifications by assets under management accounted for 76.92%.
Overall, 16 of the 139 peer groups each accounted for more than 1% of assets under management. In total, these 16 peer groups accounted for $8,922.9 bn, or 85.11%, of the overall assets under management.
The peer groups on the other side of the table showed some funds in the U.S. ETF market are quite low in assets and their constituents may face the risk of being closed in the near future. They are obviously lacking investor interest and might, therefore, not be profitable for their respective fund promoters.
ETF Flows by Lipper Global Classifications
The net inflows of the 10 best-selling Lipper classifications accounted for $97.9 bn. In line with the overall sales trend for April, equity peer groups (+$48.8 bn) gathered the majority of flows by asset type on the table of the 10 best-selling classifications by estimated net inflows for April 2025. Given the overall fund flow trend in the U.S. ETF industry, it was not surprising that Equity U.S. (+$34.5 bn) was the best-selling Lipper global classification for April. It was followed by Bond USD Government Short Term (+$19.6 bn) and Equity Global ex U.S. (+$9.2 bn).
The flows on classification level do show even better that U.S. investors seem to have bought into U.S. large caps during the market turmoil after the announcement of new tariffs regime, to participate from the market recovery.
Despite the fact that there are classifications from various asset types on the table of the 10 best-selling classifications, these numbers show that the U.S. ETF segment is highly concentrated when it comes to the estimated net flows by classification. Generally speaking, one would expect the flows into ETFs to be concentrated since investors often use ETFs to implement their market views and short-term asset allocation decisions. These products are made and, therefore, are easy to use for these purposes.
On the other side of the table, the 10 classifications with the highest estimated net outflows for April faced higher outflows than those for March (-$13.9 bn), since these classifications accounted for $33.6 bn in outflows.
Whilst Equity U.S. was the the best-selling classification for the month, Equity U.S. Small & Mid Caps (-$6.5 bn) was the classification with the highest outflows for the month. It was bettered by Loan Participation Funds (-$5.5 bn), Bond USD High Yield (-$5.3 bn), Equity Theme Natural Resources (-$3.0 bn), and Equity Sector Financials (-$2.8 bn).
Assets Under Management by Promoters
A closer look at assets under management by promoters in the U.S. ETF industry also showed high concentration, with only 93 of the 396 ETF promoters in the U.S. ETF industry holding assets at or above $1.0 bn—accounting for $10.427.6 bn in assets under management. The largest ETF promoter in the U.S.—iShares ($3,186.5 bn)—accounted for 30.39% of the overall assets under management, ahead of the number-two promoter—Vanguard ($3,035.1 bn)—and the number-three promoter—SPDR ($1,471.7 bn).
The 10-top promoters accounted for 90.38% of the overall assets under management in the U.S. ETF industry. This meant, in turn, the other 386 fund promoters registering at least one ETF for sale in the U.S. accounted for only 9.6% of the overall assets under management.
ETF Flows by Promoters
Since the U.S. ETF market is highly concentrated with regard to the assets under management by promoter, it was surprising that only five of the 10 largest promoters by assets under management were among the 10-top selling ETF promoters for April. Vanguard was the best-selling ETF promoter in the U.S. for April (+$37.5 bn), ahead of Charles Schwab (+$13.0 bn) and Direxion (+$5.5 bn).
The flows of the 10-top promoters accounted for estimated net inflows of $75.4 bn. As for the overall flow trend in April, it was clear that some of the 396 promoters (121) faced estimated net outflows (-$25.7 bn in total) over the course of the month.
Assets Under Management by ETFs
There were 4,208 instruments (primary share classes/portfolios [4,139] and [convenience] share classes [69]) listed as ETFs in the Lipper database at the end of April. Regarding the overall market pattern, it was not surprising assets under management at the ETF level were also highly concentrated. Only 762 of the 4,139 ETFs (primary share classes = portfolios) held assets above $1.0 bn each. These ETFs accounted for $9,949.0 bn, or 94.90%, of the overall assets in the U.S. ETF industry. The 10 largest ETFs in the U.S. accounted for $3,175.7 bn, or 30.29%, of the overall assets under management.
Estimated Net Flows at the ETF Level
A total of 1,906 of the 4,139 ETFs (primary share classes = portfolios) analyzed in this report showed net inflows of more than $10,000 each for April, accounting for inflows of $183.9 bn. This meant the other 2,233 ETFs faced no flows, or net outflows, for the month. Upon closer inspection, 270 of the 1,906 ETFs posting net inflows enjoyed inflows of more than $100 m during April—for a total of $159.1 bn. The best-selling ETF for April was Vanguard 500 Index Fund;ETF, which enjoyed estimated net inflows of $21.2 bn. It was followed by SPDR Bloomberg 1-3 Month T-Bill ETF (+$6.6 bn) and iShares 0-3 Month Treasury Bond ETF (+$5.5 bn).
The flow pattern at the fund level indicated there was a lot of turnover and rotation during April, but it also showed the concentration of the U.S. ETF industry even better than the statistics at the promoter or classification levels since the 10 best-selling ETFs account for inflows of $58.9 bn.
Given its size and the overall trend for net sales at the promoter level, it was surprising that only three of the 10 best-selling funds for April were promoted by iShares. These iShares ETFs accounted for estimated net inflows of $10.7 bn.
Article by Detlef Glow, Research Lead ETFs, LSEG Data & Analytics
