ETFs in 2024: New paths to growth

The outlook for etfs hero

What’s the next big thing for ETFs? Our experts revisit their predictions from last year and reveal which trends they expect to shape the future of the industry.

February 2024

Frank koudelka

Frank Koudelka
Global Head of ETF Solutions

Jeff sardinha

Jeff Sardinha
Head of ETF Solutions, North America

Ciaran fitzpathrick

Ciarán Fitzpatrick
Head of ETF Servicing, Europe

At the start of every year, we anticipate what the most important trends shaping the future of the ETF industry might be. We then put pen to paper to record our predictions. This serves as an important tool for understanding what we got right during the past year, where we might have missed the mark, and where, if necessary, we might look to recalibrate.

While there is no such thing as a crystal ball in our industry, our prognostications have historically boasted a strong track record according to both ETF products and geography. Indeed, much of what we predicted in 2023 came to pass: Strong growth in ETFs continued, with a focus on active ETFs. In fact, interest in that space proved so strong that active ETFs saw record flows in multiple jurisdictions (more on that later).

However, there were also surprises – for instance, the speed and volume of bitcoin ETF approvals after the Washington, DC Court of Appeals ruled the Securities and Exchange Commission had erred in denying Grayscale’s proposed bitcoin ETF.

In this paper, we highlight key developments and revisit our predictions from last year’s report, ETFs Outlook for 2023: Continued Innovation and Growth. We then look ahead to the trends we expect will shape the market in 2024. Among other things, our analysis is informed by the annual Trackinsight Global ETF survey of more than 500 professional investors, which State Street co-sponsors. The survey is designed to provide an understanding of how professional investors and fund selectors are leveraging ETFs, and the results for 2024 are available in the new report.

Three decades of innovation
2023 was an important year for ETFs as it marked the 30th anniversary of the first ever US-listed ETF, SPY, which we launched in 1993. As a leading manager of ETFs worldwide, and the largest ETF custodian servicing nearly half of ETF assets globally, State Street has been at the forefront of ETF innovation and for 30 years since we have been delivering new ways to support this exciting marketplace by providing our expertise and seeking diverse insights into the future.

To mark this anniversary, we produced a video series, entitled ETFs at 30, that captured reflections from industry leaders about the past, present and future of ETFs. In conjunction with the series, we asked these luminaries, “What’s the next big thing in ETFs?” We showcase their responses at the end of this report, and we trust you will find their insights both interesting and informative.


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