North American institutional investors have almost doubled their ETF usage over the past five years, with assets reaching approximately $337bn in 2025.
According to a study by Cerulli and Invesco, titled Inside Institutional ETF Adoption – How asset owners are broadening use cases, ETF holdings among North American institutional investors grew at a 14.4% five-year compound annual growth rate (CAGR) from 2020 to 2025. This significantly outpaced the broader US institutional market, which grew at a 5% CAGR over the same period.
Institutional asset owners are now allocating to ETFs as both a core portfolio holding and in an operational or tactical manner. According to the study, institutions expect to continue expanding ETF use across both strategic and operational applications. Nearly half of institutional ETF users expect to increase their ETF allocations over the next 24 months, while 16% of current non users plan to begin using ETFs during that period.
“As asset managers remain dedicated to developing new ETFs – most notably actively managed strategies and esoteric index exposures – it is important for asset owners to keep a pulse on the pace of innovation and how those new products can be used within portfolios,” said Brendan Powers, director of product development research at Cerulli.
“We believe the use cases for ETFs institutional adoption will continue to grow especially for investment teams seeking to increase team capacity, address liquidity concerns, access unique investment strategies, and co-manufacture desired exposures,” he concluded.
The study published findings from 31 institutional decision makers in North America with at least US$1bn in assets under management (AUM) in Q4 2025 and Q1 2026.
