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At the end of June 2025, the Global Exchange Traded Fund (ETF) industry had 14,390 products, with 28,447 listings, from 876 providers on 81 exchanges in 63 countries (source: ETFGI). As shown below, since 2007, the $16.99 trillion USD of global market value was 5.7x the $2.948 Tn in 2015 and 20x the $831 billion of 2007.

In the first half of 2025, global ETF assets increased 14.5% on robust monthly inflows totalling $897.65 billion in June alone–the highest on record and the 73rd consecutive month of net inflows. iShares Core S&P 500 ETF (IVV US) gathered $13.81 Bn, the largest individual net inflow.

The top 10 Exchange Traded Products (ETPs) by net new assets collectively gathered $3.13 billion in June–8 of the 10 in the precious metals space (see table below). iShares Physical Gold ETC (SGLN LN) gathered $680.44 Mn, the largest individual net inflow.

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A world of heavily promoted investment products holding similar assets in different marketing wrappers offers much less diversity than imagined. Three companies, Vanguard Group, BlackRock Inc. (iShares owner), and State Street Corp., now collectively control more than 75% of US ETF assets.

Nearly 60% of the capital in US markets has been passive (as shown below since 2009), characterized by automated buying, without anyone conducting investment analysis or selection. So much for the timeless adage that we should only invest in things we understand.

Chartered Financial Analyst Michael Green has been a leading voice on the reality and dangers of passive flows. He updates on the latest trends in the segment below, noting that most market participants are utterly unaware of what’s happening with their money.

Michael Green of Simplify Asset Management explains how passive investing distorts markets and will create a bubble. He also discusses how the Pension Protection Act further spurred passive investments, especially since vast majority of people have ‘absolutely no idea’ what is happening with their retirement funds. Here is a direct video link.

As we have seen repeatedly, passive inflows fuel risk-complacency and extreme over-valuations, but they do not hold market prices up permanently. If passive flows were crash protection, we would not have seen recurring market freefalls in recent years, even with employment near-cycle highs.

Market sentiment turns at the margins. Inflows continue until job losses rise enough to curtail and reverse them. Job losses are increasing now. There’s also the 43% of assets that active funds and trend-following managers direct, along with share buyback programs that typically retreat as prices fall.

Concentrated masses with little cash and the same long-duration assets magnify downside risk and the need to sell the same holdings simultaneously. We’ve seen this film before.

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