There has been a “surge” in new ETF investors, driven by demand for convenience, cost efficiency and diversification, according to the findings of a report by BlackRock released on Thursday.
Among the estimated 19 million Americans who plan to invest in ETFs over the next 12 months, 44% are expected to be first-time ETF investors, BlackRock says in its first U.S. “People & Money” report concentrating on the next wave of ETF investors.
At the same time, 56% of current ETF investors intend to increase their allocations, according to the report, which was based on the findings of an online survey sponsored by BlackRock and conducted by YouGov between July 22 and Aug. 3. The survey used a sample of 5,220 nationally representative U.S. adults, BlackRock said.
The first-time ETF buyers are expected to start younger and with lower incomes, BlackRock said, noting 71% of the respondents were under the age of 44.
The top factors driving ETF adoption among those surveyed included diversification benefits (cited by 47% of survey respondents), ease of trading (40%) and the potential for better returns compared to traditional savings accounts (37%), according to BlackRock. In addition, it said that investors from 35 to 44 years are using ETFs for convenience.
“We’re witnessing a pivotal moment as individual investors embrace ETFs for their efficiency and transparency,” Amy Jenkins, Head of U.S. Direct Investing at BlackRock, said in a news release. “The predicted surge in first time ETF investors reflects a broader shift in investor preferences toward simplicity, accessibility, and digital-first experiences.”
She added, “We’re committed to expanding access to solutions that make recurring investing simple and intuitive through iShares ETFs — helping more Americans build wealth steadily, one contribution at a time.”
The survey also found that 38% of investors are interested in recurring investing plans, according to BlackRock. “These approaches offer simplicity, discipline, and alignment with life goals,” the firm said.
The firm said investors aged 18 to 34 are 50% more likely than those over 35 to use ETFs so they can invest small amounts regularly.
According to the report, Americans are investing across all ages and income levels. Most of them are investing via digital investment platforms (39%), employer retirement plans (35%) and advisors (31%), with younger investors favoring ETFs and cryptocurrencies.
BlackRock estimated that 24 million investors own ETFs now.
The surge of investing in the U.S. has “coincided with the extraordinary growth of U.S. ETF assets, which have more than doubled in just five years,” growing from $4.4 trillion in 2020 to more than $12 trillion as of Aug. 12, the report said.
“ETFs have revolutionized how millions of people invest today,” Elise Terry, Head of U.S. iShares at BlackRock, said in the release. “These findings reflect growing demand for diversified exposures through efficient, transparent vehicles — and a rising appetite for choice in how Americans seek to grow their wealth.”
She added, “This momentum underscores the need to accelerate innovation, broaden access, and scale education to pursue better outcomes for all investors.”
BlackRock’s survey findings come shortly after Cerulli Associates said ETFs have emerged as the fastest growing product on digital investing platforms and, in a separate report, said 71% of ETF issuers surveyed noted it was difficult to obtain shelf space on broker-dealer platforms for active ETFs.
Jeff Berman, Contributing Editor and Reporter at Wealth Solutions Report, can be reached at jeff.berman@wealthsolutionsreport.com.
