The U.S. ETF industry's hottest product is no longer just a blockbuster fund, it's the copycat.
A record 1,084 ETFs had launched by mid-July, already within striking distance of 2025's full-year record of 1,161, per Morningstar. With U.S.-listed ETF inflows on pace to reach $2.3 trillion this year, as estimated by State Street, issuers are racing to capture the next winning investment theme before rivals do. And interestingly, a successful ETF doesn't just attract assets, it spawns an entire category.
DRAM Ignites the Memory ETF Boom
No fund illustrates the first-mover advantage better than the Roundhill Memory ETF (DRAM).
Launched in April, DRAM became one of the fastest-growing ETFs in history, hitting $20 billion in assets within weeks as investors sought exposure to AI memory-chip leaders such as Micron Technology Inc (MU), SK hynix Inc (SKHY) and SanDisk Corp (SNDK).
Its success brought memory semiconductors into the spotlight, sparking a series of ETFs either replicating it or offering amplified exposure to it.
The newly-launched Leverage Shares 2X Long Memory Daily ETF (RAML), the proposed first-of-its-kind T-Rex 2X Inverse Memory ETF (RAMZ) are among a few. XFUNDS' Memory Income ETF (DRMY) was a week early, pairing memory semiconductor exposure with an options-income strategy. In just a few months, a single thematic ETF has evolved into a crowded battleground.
SpaceX and SK hynix become ETF ecosystems
The copycat phenomenon has continued.
Following SK hynix's U.S. listing, Leverage Shares introduced 2X Long SK Hynix Daily ETF (SKHX) and 2X Short SK Hynix Daily ETF (SKHZ), while Direxion came up with the Direxion Daily SK Hynix Bull 2X ETF (SKHL).
Meanwhile, surging demand for private-market exposure has fueled a growing roster of SpaceX-focused ETFs, with issuers including Leverage Shares, GraniteShares and Defiance ETFs launching leveraged products tied to the aerospace company within a day after the IPO.
The same trend is unfolding across AI investing.
Photonics, AI infrastructure, robotics and quantum computing have all attracted competing ETF launches shortly after the first products reached the market. As Strategas ETF strategist Todd Sohn told the Financial Times, once one issuer launches a semiconductor memory or photonics ETF, "all of a sudden you have three or four."
What the Copycat Boom Means for Investors
The flood of lookalike ETFs gives investors more choice, but it also makes the market more complex.
Many competing funds target the same theme using different structures—leveraged, inverse or income-oriented—making it harder to distinguish between products. Two ETFs focused on memory semiconductors or SpaceX, for example, can carry vastly different risk profiles, fees and return characteristics despite tracking the same underlying trend.
The rapid pace of launches also raises the odds that many funds never achieve meaningful scale. ETFs that fail to gather assets often face closure, forcing investors to exit positions or reinvest elsewhere.
According to Financial Times, Morningstar's Bryan Armour noted that leveraged single-stock ETFs accounted for nearly one-quarter of all ETF launches this year, up from 20% in 2025 and just 4% in 2024. While investor demand for these products has surged during strong market rallies, Armour warned they have historically been poor long-term investments.
Winning First Still Matters
Nearly 6,000 U.S.-listed ETFs now compete for investor dollars, but asset gathering remains heavily concentrated among a handful of standout products.
Funds such as DRAM and the iShares Bitcoin Trust (IBIT) attracted billions of dollars within months of launch, while hundreds of later entrants are likely to struggle for relevance.
That helps explain Wall Street's "copy, paste, repeat" strategy. In today's ETF market, success is more about identifying the next investable trend before everyone else, than launching another broad-market index fund. But as more issuers pile into the same themes, the industry's biggest challenge may no longer be creating the next blockbuster ETF—it's convincing investors why the fifth or sixth fund chasing the same trade deserves a place in their portfolios.
