ETFs are flush with new money. Why billions more are flowing their way

Investors have plowed more than $900 billion into U.S. exchange-traded funds so far this year.

Investors are putting more money than ever into exchange-traded funds, and Washington just took a step that all but ensures the billions will keep flowing.

U.S.-listed ETFs have taken in a net $917 billion through Sept. 29, according to FactSet. If that pace holds during the fourth quarter, when inflows tend to pick up, it will be the market’s second straight record year. In 2024, ETFs added $1.1 trillion.

ETFs, which trade like individual stocks and boast certain tax advantages over mutual funds, emerged in the 1990s as a cheap and efficient way to keep up with gains in the broader stock market. This year, bullish and cash-rich investors—and their interest in investment strategies that go bey