Funds galore

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Gone are the days where a handful of exchange-traded funds provided a cheap and reliable lynchpin for your portfolio. Nowadays, ETFs are a dime a dozen—and investors can’t get enough of them.

Thanks to fewer opportunities to stand out in traditional passive and active strategies, asset managers are increasingly designing off-the-wall products to grab investors’ attention. The result: some pretty complicated new options, and a record boom for ETFs.

Number go up

There were 1,023 new ETFs launched in the first eight months of this year, according to research from Wall Street Horizon—a 52% jump year-over-year. But where there’s a boom, there’s also some bust: More than 250 have closed year to date, compared to the roughly 165 closures at this time in 2025.

No funds are immune—we’ve seen closures at some of the industry’s major players, including BlackRock’s iShares and Invesco; the same goes for firms with funds that are more narrow in scope, like Bitwise (crypto) as well as Leverage Shares and GraniteShares (which focus on leveraged ETFs). But instead of taking the rising number of closures as a reason to fret, some analysts say they’re evidence of efficiency: ETFs that don’t work for investors are being pushed out more quickly.

“Not every new product will achieve the investor adoption or scale needed to remain viable,” GraniteShares founder and CEO Will Rhind told Barron’s last month. The firm is “comfortable taking calculated risks and bringing innovative ideas to market,” but “that also means being disciplined enough to close a fund when it has not gained sufficient traction.”

Inflows keep flowing

The other outcome of a super-efficient ETF scene: More cash flowing through these products than ever.

Independent ETF research group ETFGI reports that American exchange-traded funds pulled in $73 billion in August alone, bringing the year’s inflows to $663 billion, and total ETF industry assets to a record $2.72 trillion. Those are eye-watering numbers, especially considered in the big picture: Active ETF assets have increased 42.6% year to date.

So, where is all that cash going? When it comes to industries, that can be summed up in two letters: AI. A State Street analysis finds that tech took in $13 billion of the $17 billion invested into industry-specific ETFs in June.

But while tech-focused ETFs have stolen the spotlight, investors aren’t throwing all their money at AI alone. When it comes to single-fund inflows, reliable, low-cost options still dominate: The classic Vanguard S&P 500 ETF has pulled in more money than any other single ETF product this year, climbing above $1 trillion in assets for the first time ever this summer.

Running the risk

As ETF investments grow by leaps and bounds, it seems inevitable that issuers would start testing just how far the enthusiasm could go—and push the boundaries. The cheap, set-and-forget ETFs of yore are no longer the whole game.

Thanks to those new experiments, whether they be derivative-based, single-stock, or defined-outcome, an ETF now can be as risk-motivated as any other investment. It’s a total reinvention of the ETF’s reputation, and investors are enjoying the wild ride.—GR

      

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Stocks

Q3 is officially in the books, so let’s take a look back at the last three months and check in on the winning ETFs that raked in returns—and the losers that burned investors with losses.

🟢 What’s up

• The United States Oil Fund climbed 43.57% to date this quarter as global crude oil supply tightened and pushed up domestic prices.
• The iShares Genomics Immunology and Healthcare ETF boomed 24.07% thanks to developments in personalized cancer treatment and breakouts by holdings like Moderna.
• The Sprott Junior Gold Miners ETF jumped 26.47% as late-summer gold prices surged and then started consolidating.
• And the US Global GO GOLD and Precious Metal Miners ETF similarly rose 23.61%, alongside Middle Eastern conflict reestablishing gold as a safe haven asset.

🔴 What’s down

• The Invesco Semiconductors ETF dropped 13.65% to date this quarter, in part from investors backing off risk across the AI infrastructure buildout.
• The Leverage Shares 2X Long CRML Daily ETF sank 55.36% despite promising news in Greenland for the high-beta, single-stock fund focused on rare earths outside China.
• The US Natural Gas Fund deflated 3.73% thanks to mild winter forecasts ahead.

Funds to watch

Meet the best of the bunch

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The year isn’t over yet, so there’s still plenty of time for new, even more niche, ETFs to enter the market (more on the explosion of themed funds later). But with 75% of the year in the books, it’s worth taking a look at some of the heavy-hitters across the ETF world.

Take the top-performing Breakwave Tanker Shipping ETF, which benefited from Middle East conflict severely disrupting crude oil shipping routes along the Strait of Hormuz. That sent freight transport soaring, pushing the ETF up 4,777% over the last 12 months.

Then there’s the fastest-growing ETF on the market in years: Roundhill Investment’s Memory ETF (DRAM), which, as its name implies, is focused on the memory industry. The fund raised over a billion dollars in a single day in early May.

DRAM was the poster child of themed ETFs this year, but it’s also a warning for investors who want to put all their money into one basket. Though the fund has soared over 129% since its April debut, it has sunk 23.8% since its June high as the AI trade lost momentum over the summer.

A few other surprise hits:

🌡️ A fund pegged to the temperature. The Harbor Commodity All-Weather Strategy ETF, which holds inflation-sensitive commodities like petroleum and gold, has gotten hot thanks to a steaming economy; the fund has gained about 44% this year to date.

🤏 A fund that thinks small. With the stock ticker TINY, the ProShares Nanotechnology ETF is focused on companies that manipulate matter on the nanoscale—and given their role in semiconductor manufacturing, it’s up 42% this year.

🏠 A fund banking on the block. ETFs focused on blockchain allow investors to hold corporate equities, like crypto exchanges and miners, rather than actual cryptocurrencies. But thanks in part to bitcoin’s bouncy ride this year, this risky investment has delivered some rewards. The State Street Galaxy Digital Asset Ecosystem ETF, for one, has risen 72% this year, outpacing some other blockchain bets because of blended exposure.—GR

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Trends

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Investors love a good rollercoaster ride, so it’s no wonder that they’ve been turning to themed ETFs, or exchange-traded funds that target specific investment categories, industries, or trends.

Investors who want to put their money into fast-moving, disruptive companies grabbing headlines, take a chance on extra profits with leveraged funds, or invest in their personal interests can now do just that thanks to themed ETFs.

The exchange-traded explosion

Traditional ETFs have long anchored portfolios, but a new class of themed ETFs are offering more out-there strategies that are often risky, concentrated, or a pure attention play. There were more than 700 ETFs launched in the first half of this year, according to CFRA Research—many focused on the attention economy, and a far cry from the safe bet of the traditional exchange-traded fund.

Consider some of these ETF categories, ordered by increasing zaniness:

🛍️ Some shop your values. ESG ETFs pull from companies meeting certain environmental, social, and governance standards—and allow investors to steer clear of controversial industries like tobacco or weaponry. Others get more granular, letting you grab funds pegged to niches like solar energy or developing nations.

🥭 Some get fruity. For some forward-looking (and risk-ready) investors, attention has shifted from the Magnificent 7 to a group known as MANGOS: Meta, Anthropic, Nvidia, Google, OpenAI, and SpaceX. New ETFs using special purpose vehicles to bundle in private startups allow investors to grab a stake before half the fruit goes public.

💼 Some track big feelings. Executive sentiment ETFs are built to follow the movements of leaders who occupy big business positions. Funds like the Direxion All Cap Insider Sentiment ETF pull stocks where executive officers and directors are actively accumulating serious shares. Others, like the VanEck Social Sentiment ETF BUZZ, track stock mentions on social media to see which companies have retail investors’ attention.

🤑 Some meme out. Funds like Roundhill’s MEME or YEET have names that tell you all you need to know: They track meme stocks for high-risk/high-reward payouts that vary from week to week. But don’t expect Reddit picks like AMC or American Eagle—they favor names linked to markets having sudden surges, like AI infrastructure or covid vaccines.

🪐 Some consult the stars. Banking on the notion that parts of the US government operate decades ahead on intelligence, the Tuttle Capital UFO Disclosure ETF buys stocks that could profit from official confirmation of aliens’ existence.

Young love

So who’s taking a romp around the ETF theme park? Interest in theme ETFs is spread across generations, according to Nasdaq’s 2025 Retail ETF Investor Survey. But there’s a good reason to watch younger investors lining up for the ride.

The report finds that millennials and Gen Z planned to be the most aggressive ETF investors last year, and Gen Z in particular notes that they’re influenced by digital platforms and social media. Those sources often promote high-risk investments—just as the environment turns them from options like mutual funds.

″[Younger investors] are more comfortable with ETFs than older investors, because mutual funds are less prevalent and relevant than they were for their parents’ generation,” Todd Rosenbluth, Head of Research at VettaFi, told CNBC. “The younger generation are more likely to appropriately take on some risk through the equity marketplace and have more time for these strategies to take hold.”—GR

      

recs

👶 The kids are alright. Gen Z gets a lot of flack for their financial decisions, but young investors are increasingly turning to ETFs to begin building their wealth.

🔒 With 10-year Treasury yields firmly above 5%, here are five fixed-income ETFs that can provide you with safe returns.

💰 This insight might be worth its weight. Why one ETF-focused analyst thinks bitcoin ETFs could triple the size of gold funds in the next five years.

🤖 Looking to invest in Anthropic before you can invest in Anthropic? Firms are already building single-stock ETFs around the AI giant.

📈 Higher rates can have a silver lining: These three ETF picks could deliver nice returns if interest rates keep rising.

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