Via kiplinger.com
US ETF industry sees record 390 launches in 2 months, and half of them use derivatives
The American ETF market is churning out new funds faster than ever, with leverage and active strategies dominating the surge.
By early May, 370 new ETFs had already hit the market, comfortably outpacing 2025’s tally of 290 by the same point. By late July, that number ballooned to 953 total launches, putting the industry on a trajectory to blow past the all-time annual record of 1,095 set back in 2021.
Derivatives and leverage everywhere
A full 50% of the ETFs launched this year incorporate derivatives, a record-high proportion. Half of all new ETFs are using options, swaps, or futures contracts as core building blocks rather than just holding baskets of stocks.
There are now 701 leveraged and inverse products on the market, more than double the count at the end of 2024. These funds are engineered to amplify returns on individual stocks or specific themes, like memory chips and AI technologies. Some of the AI-focused offerings have already crossed $3 billion in assets under management.
Meanwhile, 85% of this year’s new launches are active strategies, meaning a human (or at least a human-designed algorithm) is making decisions about what to buy and sell, rather than passively tracking an index.
Crypto ETFs keep rolling off the line
Multiple spot Bitcoin and Ethereum ETFs have launched this year, building on the momentum that started when regulators first approved spot Bitcoin ETFs. The market reception has been broadly positive, suggesting that investor demand for regulated, exchange-traded crypto exposure hasn’t faded.
When BlackRock, one of the key issuers driving this year’s launch boom alongside Direxion and ProShares, puts its name on a crypto product, it sends a signal that reverberates through boardrooms and allocation committees.
What this means for investors
The risk side of the equation centers on complexity. When half of all new ETFs use derivatives and the leveraged product count has doubled in roughly 18 months, the potential for retail investors to misunderstand what they’re buying increases substantially. A leveraged ETF that resets daily doesn’t behave the way many investors expect over longer holding periods, and the math of compounding can turn a correct directional bet into a losing position.
The competitive dynamics among issuers like BlackRock, Direxion, and ProShares suggest this pace of innovation isn’t slowing down anytime soon.