The U.S. ETF industry just had a record-breaking first half of 2026, and J.P. Morgan Asset Management thinks the party is far from over. In its latest U.S. ETF Midyear Outlook, the firm predicts inflows will keep exceeding expectations well beyond next year, as investors increasingly turn to active strategies for income, diversification, and risk management.

During the first half, ETFs attracted more than $1 trillion in inflows—the fastest pace on record—putting 2026 on track to finish 35% to 40% ahead of last year's record. The report points to three forces shaping investor allocations: volatility, market concentration, and diversification.

Jon Maier, Chief ETF Strategist at J.P. Morgan Asset Management, sees no signs of the momentum fading.

“We have yet to see any signs of moderation and believe ETF inflows will outpace expectations for 2027 and beyond,” Maier told MarketDash, citing the structure's liquidity, transparency, and tax efficiency. He reiterated the firm's forecast that U.S. ETF assets could reach $25 trillion by 2030.

Active ETFs Continue To Gain Share

One of the report's biggest themes is the continued rise of active ETFs. They accounted for 33% of all ETF inflows during the first half, with both active equity and fixed-income products setting new flow records.

Maier expects fixed income to be the next major growth engine. While bonds currently account for only about 16% of the $16 trillion ETF market, J.P. Morgan forecasts the global fixed-income ETF market will nearly double from roughly $3.6 trillion today to $7 trillion by 2030. Active fixed-income ETFs could expand from about $650 billion to $2 trillion over the same period.

He noted that active fixed-income ETFs have grown at a 40% compound annual rate over the past decade, twice the pace of passive products. Two-thirds of fixed-income ETF launches over the past year have been actively managed.

Active Investing Is No Longer Just About Alpha

According to Maier, investor demand has evolved beyond the traditional debate over whether active ETFs should deliver outperformance or downside protection. Instead, investors increasingly want active strategies that solve specific portfolio problems—whether that's generating excess returns in less-efficient markets, managing risk, or producing income.

That shift has fueled rapid adoption of derivative-income ETFs, whose assets have grown from virtually zero in 2023 to nearly $200 billion today, according to the report.

Maier cautioned investors against focusing solely on headline distribution yields. “These strategies were never designed to maximize upside,” he said. “They were built to generate income while helping reduce portfolio volatility.”

AI Still Matters—But Investors Need Broader Exposure

Although technology continues to dominate ETF flows, Maier argues investors should rethink how they access the AI opportunity rather than abandon it. “It is crucial to be diversified within AI and tech because narratives are changing so rapidly,” he said, adding that investors should spread exposure across individual stocks, subsectors, and sectors rather than concentrating solely on mega-cap technology names.

He also noted that roughly 60% of year-to-date tech ETF flows have gone into actively managed funds, giving investors more ways to capture beneficiaries across the AI value chain. The report warns that concentration risk remains elevated, with technology accounting for nearly 40% of the S&P 500 and the index's top 10 holdings representing about 40% of the benchmark.

Diversification Broadens Beyond U.S. Growth Stocks

J.P. Morgan also sees opportunities outside the traditional growth trade. While investors have continued pouring money into large-cap growth, Maier said value investing could eventually attract stronger flows if its recent outperformance persists. He also highlighted international value as one of the market's most overlooked opportunities, citing tailwinds from a weaker U.S. dollar, fiscal stimulus, and expanding AI adoption.

Meanwhile, thematic ETFs are enjoying a resurgence after several quiet years, though Maier believes investors should continue treating them as satellite positions rather than core holdings. Among the themes J.P. Morgan is monitoring most closely are defense, cybersecurity, and natural resources, reflecting a broader shift toward long-term structural investment trends.