According to the latest ETF Impact report from State Street Global Advisors, the global ETF market is expected to achieve a historic milestone with traffic expected to reach $2 trillion. This significant growth is changing the way investors build portfolios with active management and innovation in new asset classes.

According to a report from State Street, aggressive ETF strategies are rapidly shifting from perimeter to mainstream portfolios, capturing 32% of all ETF traffic as investors seek more dynamic ways to navigate market uncertainty. This shift to active management plays a role in fixed income, where investors are within the traditional high-yield options in areas such as bank loans and mortgage obligations.

"The gap between adoption and opportunity shows that ETFs are still in the early stages of their evolution and their role in portfolio building will grow in the coming years," Anna Paglia, executive vice president and chief business officer at State Street Global Consulting, wrote in the report.

Active ETFs have seen extraordinary momentum, with active fixed income ETF assets worldwide reaching $350 billion as of December 2024. This figure will increase to $700 billion when it expires in 2026 as investors seek real-time adjustments to change market conditions.

"As the global central banking drives from accelerating reductions to tax cuts, investors are reevaluating bond positioning and relying on active ETFs to make real-time adjustments," wrote Michael Arone, chief investment strategist at State Street Global Advisors, in collaboration with Matthew Bartolini, head of SPDR Americas Research. The trend spans global markets, with active fixed income ETFs growing 33% in the Asia-Pacific region last year, with European inflows reaching $2 billion in 2024.

Searches for output facilitate growth in specialized fixed income categories. High-yield bond ETFs hold $118 billion in assets, while CLO ETFs quickly expand to $54 billion. By 2026, these securitized credit products are expected to collectively surpass traditional high-yield bond ETFs in total assets.

Digital assets and theme investments represent another major area of ​​growth. After regulatory advances, global crypto ETF assets grew 255% year-on-year to $127.7 million in 2024.

Meanwhile, AI-themed ETFs are driving record traffic for theme investments, charging $2.4 billion in the first two months of 2025 alone. Nearly half of this traffic ($1.1 billion) comes from robotics and AI-focused ETFs.