The &#34;trading gateway&#34; of the US stock market is shifting towards ETFs. Both capital and trading volume are accelerating simultaneously, making ETFs more like the main trading layer of the market rather than just allocation tools, amplifying rapid rebalancing and style switching driven by macro factors.
According to the latest report from Goldman Sachs ETF trader Chris Lucas, in the first two months of 2026, US-listed ETFs attracted over $350 billion in capital inflows, a significant increase of 80% compared to the same period in 2025.
In a market environment with increased volatility, the trading share of ETFs is rapidly expanding. On March 3rd, impacted by geopolitical news, the US market experienced severe fluctuations, with ETF trading accounting for nearly 40% of the overall US stock market that day, approaching historical records.
Goldman Sachs TMT expert Peter Callahan remarked in the day's review, &#34;The presence of ETFs in today's market movements is very significant, with very few real trades at the individual stock level.&#34;
This trend indicates that ETFs have evolved from auxiliary investment tools to core means of managing risk exposure during market volatility, and their impact on market price discovery mechanisms, liquidity structures, and even capital allocation logic is attracting widespread attention in the industry.
<h2>Capital Surge: $350 Billion in Two Months, Average Daily Inflow of $9 Billion</h2>
According to Goldman Sachs data, in the first two months of this year, US-listed ETFs recorded over $350 billion in net inflows, an increase of 80% compared to the same period in 2025. On a daily trading basis, the market averaged about $9 billion flowing into ETFs each trading day, 52% higher than the record levels of 2025.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/0269361e-3269-434c-9aa2-fd5321bc3d71.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/0269361e-3269-434c-9aa2-fd5321bc3d71.png"/>
From the perspective of asset classes, domestic equity strategies still dominate, but the inclination of incremental funds towards international markets far exceeds their current asset proportion.
Among them, broad-based emerging market equity ETFs have recorded a net inflow of $32 billion in the first two months of this year, with the annual inflow scale expected to set a historical record, as the inflow in the past two months has already surpassed the total of several complete years in the past decade.
Currently, the total asset size of US-listed ETFs has reached $14.3 trillion, an increase of nearly $900 billion compared to the end of 2025. Notably, this increase significantly outpaces the performance of US stocks during the same period (the S&amp;P 500 has risen about 0.5% year-to-date), fully reflecting the driving effect of continuous capital inflows.
<h2>Trading Share Approaching 40%: ETFs Become Risk Management Tools in Volatile Times</h2>
The rise of ETFs is not only reflected in their scale but also profoundly reshapes the intraday trading structure of the market.
Goldman Sachs data shows that over the past five years, ETFs have averaged 28% of the daily nominal trading volume of US stocks, but entering 2026, this proportion has risen to 32%. Two factors drive this increase in share:
First, the widespread adoption by institutional and retail investors has raised the baseline level of ETF trading; second, the use of ETFs as &#34;macro tools&#34; is becoming increasingly common, whether it is the volatility of gold and silver in January, the collective plunge of software stocks in February, or the recent use of USO to manage oil price risks, ETFs have played a core role
Goldman Sachs report indicates that every rise in the VIX drives more investors to turn to ETFs for quick adjustments to risk exposure. Currently, there are about 5,000 ETF products in the U.S. market, providing unprecedented levels of risk exposure and liquidity depth.
<h2>Active ETFs Accelerate, Enthusiasm for Emerging Markets Soars</h2>
The rise of active ETFs continues to accelerate. In the first two months of this year, active ETFs attracted $133 billion, accounting for 38% of total ETF net inflows, a year-on-year increase of 57%. This growth rate occurs on top of a record high base in 2025 (with an annual total of $470 billion).
In terms of emerging markets, investor enthusiasm is also unusually high. The inflow momentum into broad emerging market ETFs has surprised the market.
Taking South Korea as an example, according to the Goldman Sachs report, client activity in emerging market ETFs has been extremely high recently, particularly focused on exposure to the South Korean market. The ETF tracking the South Korean market, EWY, has seen nominal trading volume reach a historic record, with the second-highest trading day in terms of share count.
Additionally, gold ETFs have also recorded significant buying. According to Goldman Sachs data, GLD achieved its largest single-week net inflow of the year last week, reaching $3.8 billion, while spot gold prices have risen for five consecutive weeks and are approaching historical highs again.
<h2>New Products Accelerate Issuance, Scale Expected to Surpass Mutual Funds Ahead of Schedule</h2>
In 2025, over 1,160 new ETFs were issued in the U.S. market, averaging nearly 100 per month. In the first two months of this year, 177 new ETFs have already been listed, an increase of 16% compared to the same period in 2025.
Derivatives-linked ETFs are the main driving force behind this round of new issuances. More than half of the newly listed products this year have utilized derivatives in their product structure. Goldman Sachs expects that the advancement of the ETF share class system will become an important catalyst for new issuances in the second half of the year.
Goldman Sachs previously predicted that the asset size of U.S.-listed ETFs would surpass that of mutual funds around 2030; however, given the current speed of capital inflows, this timeline has been adjusted to 2029.
The rise of equal-weight strategies also confirms the breadth of structural changes. As the yield divergence between the S&amp;P 500 equal-weight index and market-cap-weighted index expands, funds are flowing out of market-cap-weighted products by 7% and into equal-weight products by 7%. Goldman Sachs stated that given the uncertainty surrounding AI prospects across multiple industries, this theme is expected to continue to play out

ETFs are strongly reshaping the U.S. stock ecosystem! In the first two months of 2026, U.S. ETFs attracted over $350 billion, an increase of 80% year-on-year. On March 3rd, U.S. stocks experienced significant volatility, with ETF trading accounting for nearly 40% of the overall U.S. market that day, approaching historical records. ETFs have evolved from allocation tools to primary trading gateways, reshaping price discovery mechanisms, liquidity structures, and capital allocation logic

- The U.S. ETF market has seen a dramatic influx of over $350 billion in the first two months of 2026, an 80% increase from the previous year.  
- ETFs now account for nearly 40% of overall market trading, highlighting their vital role in risk management during volatile market conditions.  
- With a total asset size of $14.3 trillion, ETFs are set to surpass mutual funds as new products are rapidly launched, indicating a significant shift in investment strategies.

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Are ETFs taking over the US stock market? $350 billion flowed in over two months, with trading volume approaching 40%