This year will go down as another banner one in terms of exchange traded funds launches. As of the end of July, 481 new exchange traded products (ETPs) debuted in the U. S. , or more than a third of the global total. That figure is now significantly higher because all of the 100 newest ETFs have launch dates of Aug. 11 or later.

Whether it’s single-stock ETFs, mutual fund-to-ETF conversions, new active ETFs, cryptocurrency products or fresh spins on old concepts, issuers aren’t shy about giving it “the ol’ college try. ” And that they do. As of the end of the August, there were 4,379 ETPs trading on U. S. exchanges, according to ETFGI data. That’s nearly double the tally of 2,234 seen at the end of 2024.

There’s no denying that’s growth, but some critics say it might be too much of a good thing and that the industry is just throwing stuff at the wall, hoping something sticks. That’s probably a bit trite because it’s not cheap to introduce and maintain ETFs. A low range for bringing a new ETF to market via a white label issuer is likely between $40,000 to $80,000 and that’s before $200,000 to $250,000 or more per year just to keep a single ETF in compliance and operational.

In other words, issuers aren’t just introducing ETFs on wings and prayers, but for as judicious as they may be, they might want to amplify that selectivity.

New ETF Success Far From Promised

“If it was that easy, everyone would be doing it” is simple wisdom that has a lot of relevance regarding new ETFs. That is to say this is a difficult space in which to be successful and it gets even harder with each ETF birth.

Of course, some products are born with “silver spoons” in their metaphorical mouths – namely branding advantages, but that’s not each new ETF’s lot in life. Some have to claw their way to success and some do. Many don’t.

“Most new ETFs have AUM: for those launched since 2024, the average AUM is about $230 million, but the median is only $25 million. In fact, roughly 875 have less than $50 million in AUM, underscoring that many launches fail to attract significant assets. Many still have their seed capital intact,” observes J. P. Morgan Asset Management (JPAM).

That average of $230 million for new ETFs that have come to market since the start of 2024 is actually pretty impressive and it’s more than enough to imply that issuers of the funds at or above that AUM threshold are turning profits on those products.

Conversely, approximately 875 new ETFs that have launched over the past 21 months having $50 million or less in AUM is confirmation the shiny new thing doesn’t always captivate the hearts and minds of end users, including registered investment advisors (RIAs).

Terrordome Indeed

Compeition is so intense in ETF Land that the industry has been nicknamed the ETF Terrordome by Eric Balchunas, senior ETF analyst for Bloomberg. Undoubtedly, an accurate assessment and one confirmed by the following nuggets from JPAM.

“In 2025, only 7% of all ETFs—fewer than 300 out of the more than 4,300—have attracted flows above $500 million, and just 18% have gathered more than $100 million. In 2020, 10% of all ETFs attracted flows above $500 million, and 24% gather more than $100 million. ”

Add to that, the ETF industry often epitomizes the rich getting richer, meaning it’s usually the largest funds courtesy of the biggest sponsors that haul in the most assets. That doesn’t mean upstarts and other issuers shouldn’t stop bringing product to market, but they should focus on what has the shortest odds of success.

“The proliferation of ETFs may capture attention, but the real story lies in which funds gather significant inflows—and why. The industry doesn’t need more products—it needs better ones, built on strong fundamentals, thoughtful design, and genuine investor demand,” concludes JPAM.