The "trading gateway" for US stocks is tilting toward ETFs. Accelerated capital flows and transaction volumes are transforming ETFs from allocation tools into the primary trading layer of the market, amplifying rapid portfolio adjustments and style shifts driven by macro factors.

According to a recent report by Goldman Sachs ETF trader Chris Lucas, US-listed ETFs collectively attracted over $350 billion in inflows during the first two months of 2026, a sharp 80% increase compared to the same period in 2025.

Amid heightened market volatility, ETFs' share of trading volume is expanding rapidly. On March 3, following geopolitical news shocks, US markets experienced significant turbulence, with ETF trading accounting for nearly 40% of the overall US stock market volume, approaching a historical record.

Goldman Sachs TMT specialist Peter Callahan noted in a same-day review, "ETFs played an overwhelmingly prominent role in today's market movements, with genuine stock-level trading being scarce."

This trend indicates that ETFs have evolved from supplementary investment tools into a core mechanism for managing risk exposure during market volatility. Their impact on price discovery mechanisms, liquidity structures, and capital allocation logic is drawing widespread industry attention.

Substantial Capital Inflows: $350 Billion in Two Months, Averaging $9 Billion Daily Goldman Sachs data shows that US-listed ETFs recorded over $350 billion in net inflows during the first two months of this year, an 80% increase from the same period in 2025. On a daily basis, ETFs attracted an average of approximately $9 billion per trading day, 52% higher than the record levels seen in 2025.

Domestic equity strategies continue to dominate by asset class, but incremental flows are tilting toward international markets far beyond their current asset share.

Broad emerging markets equity ETFs, for instance, recorded $32 billion in net inflows in the first two months of this year. The full-year inflow for 2026 is on track to set a new record, with the two-month total already surpassing the sum of several full-year inflows over the past decade.

The total assets under management for US-listed ETFs now stand at $14.3 trillion, an increase of nearly $900 billion since the end of 2025. Notably, this growth significantly outpaces the performance of US equities over the same period (the S&P 500 is up about 0.5% year-to-date), underscoring the driving force of sustained capital inflows.

Trading Share Nears 40%: ETFs as a Risk Management Tool in Volatile Times The rise of ETFs is not only evident in scale but is also profoundly reshaping intraday trading structures.

Goldman Sachs data indicates that over the past five years, ETFs accounted for an average of 28% of daily nominal trading volume in US stocks. However, in 2026, this proportion has risen to 32%. Two key factors are driving this increase: First, widespread adoption by both institutional and retail investors has raised the baseline level of ETF trading volume. Second, the use of ETFs as "macro tools" is becoming more prevalent, whether during the volatility in gold and silver in January, the collective slump in software stocks in February, or recent risk management related to oil prices via funds like the United States Oil Fund (USO). ETFs have played a central role in these events.

The report notes that each increase in the VIX index prompts more investors to turn to ETFs for rapid risk exposure adjustments. There are currently approximately 5,000 ETF products in the US market, offering unprecedented risk exposure and liquidity depth.

Active ETFs Accelerate, Emerging Markets Enthusiasm Soars The momentum behind active ETFs continues to accelerate. In the first two months of this year, active ETFs attracted $133 billion in inflows, accounting for 38% of total ETF net inflows—a 57% year-over-year increase. This growth is occurring on top of the record high base set in 2025 (which saw $470 billion in inflows for the full year).

Investor enthusiasm for emerging markets is also exceptionally strong. The intensity of inflows into broad emerging market ETFs has surprised market observers.

Using South Korea as an example, the Goldman Sachs report highlights extremely high client activity in emerging market ETFs recently, particularly focused on exposure to the Korean market. Trading volume for the iShares MSCI South Korea ETF (EWY) reached a record high in nominal terms and was the second-highest trading day by share count.

Additionally, gold ETFs have seen significant buying interest. According to Goldman Sachs data, the SPDR Gold Shares (GLD) ETF recorded its largest weekly net inflow of the year last week at $3.8 billion. The spot price of gold has risen for five consecutive weeks and is approaching its historical high again.

New Launches Accelerate, Assets Poised to Surpass Mutual Funds Sooner In 2025, over 1,160 new ETFs were launched in the US market, averaging nearly 100 per month. In the first two months of this year alone, 177 new ETFs have been listed, a 16% increase compared to the same period in 2025.

Derivatives-linked ETFs are a primary driver of this new issuance wave, with over half of the newly launched products this year incorporating derivatives in their structure. Goldman Sachs anticipates that the advancement of ETF share class frameworks will be a key catalyst for new launches in the second half of the year.

Goldman Sachs previously predicted that the asset size of US-listed ETFs would surpass that of mutual funds around 2030. However, given the current pace of inflows, this milestone has been revised forward to 2029.

The sudden prominence of equal-weight strategies also illustrates the breadth of this structural shift. As the performance gap widens between the S&P 500 Equal Weight Index and its market-cap-weighted counterpart, flows are shifting—7% out of market-cap-weighted products and 7% into equal-weight products. Goldman Sachs suggests that, given the uncertainty surrounding AI prospects affecting multiple industries, this theme is expected to persist.