State Street Investment Management announced Tuesday that investors are rapidly channeling funds into US exchange-traded funds (ETFs), with inflows exceeding $1 trillion so far this year.

State Street indicated that US ETF inflows could potentially reach a record annual high of $1.4 trillion by the end of 2025. As investors continue withdrawing from traditional mutual funds and shifting toward lower-cost, more liquid ETFs, virtually all ETF categories are benefiting from this flood of new capital.

"Any market correction might slow the pace, but it won't stop the trend," said Matthew Bartolini, head of global research strategy at State Street.

According to State Street, US ETF inflows reached the $1 trillion milestone on December 11 last year, marking the first time this threshold was achieved. Bartolini noted that this remarkable pace has accelerated this year, with investors directing funds across all sectors, from low-cost, vanilla ETFs linked to the S&P 500 to cryptocurrency and gold ETFs.

Data released Tuesday by industry analytics firm ETFGI showed that the US ETF industry's assets under management reached $12.7 trillion as of the end of September, following 41 consecutive months of net inflows. ETFGI reported that asset growth has approached 23% year-to-date.

Elise Terry, head of US iShares at BlackRock, the world's largest single ETF issuer, stated that the over $1 trillion in inflows "underscores the need for accelerated innovation, expanded market access, and educational scale."

Michael Venuto, chief investment officer at ETF provider Tidal Financial Group, said that outflows from mutual funds will continue to drive ETF inflows higher. According to Morningstar data, mutual fund outflows totaled $481 billion in the first nine months of 2025.

"The current situation is impressive because it's continuing amid increasing market uncertainty," Venuto said. "We're in daily discussions with asset management companies looking to launch new ETFs or convert existing mutual funds to ETFs."