ETFs 2025: Cheap, Fat, Starving for Attention

Dave Nadig

Research

18 Pages

ETF.com analyzes the maturing ETF landscape, where record-low fees, crowded products, and investor fatigue are reshaping competition. The report highlights how issuers are cutting costs to near zero, chasing niche strategies for differentiation, and relying more on distribution and marketing than innovation to capture flows.

Key Takeaways

Fee compression: The asset-weighted average ETF fee fell below 0.16% in 2025, forcing smaller issuers to consolidate or exit.
Flow concentration: The top 20 ETFs captured over 60% of net inflows YTD, reflecting investor preference for liquidity and scale.
Innovation fatigue: Thematic and leveraged ETFs now make up 12% of launches but underperform broad-market peers by ~8% annually.
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