ETFs Outnumber Stocks in US Market for First Time

Historically, exchange-traded funds (ETFs) have been a niche product category in the US financial market. However, recent data from Morningstar reveals that for the first time, there are more ETFs than publicly listed companies trading on US exchanges.

The count of ETFs has roughly doubled over the past eight years, with over 4,300 funds currently available compared to approximately 4,200 stocks. This rapid growth can be attributed to the increasing popularity of actively managed funds and thematic plays, which have expanded beyond traditional index trackers like the SPDR S&P 500 ETF.

The total assets under management in US ETFs have surged above $13 trillion by late 2025, with fund issuers leaning heavily into active management strategies, thematic investing, and highly specialized niche products. Meanwhile, the number of publicly listed companies has been on a decline due to mergers, acquisitions, private equity buyouts, and fewer initial public offerings (IPOs).

The emergence of crypto-native ETFs has played a significant role in driving growth in this sector. The approval of spot Bitcoin ETFs in January 2024 and spot Ethereum ETFs in July 2024 marked a pivotal moment for the industry, with Bitcoin ETFs alone surpassing $100 billion in assets under management by the end of 2024.

As more issuers explore additional crypto-related fund concepts, including actively managed crypto ETFs and multi-asset digital token baskets, investors should be cautious of the growing risk of product bloat. Many newly launched ETFs may struggle to gather enough capital to remain economically viable, emphasizing the importance of careful consideration when selecting funds.