Fund Industry Overview: By the Numbers
Last updated: February 2026 | Data as of: Year-end 2025
The U.S. fund industry closed 2025 managing approximately $44.9 trillion across mutual funds and ETFs combined, yet the composition of that total would have been almost unrecognizable a decade ago. ETF assets surged past $13.5 trillion, up 30% in a single year. Index fund assets surpassed active fund assets for the first time in history. And the number of ETF launches hit an all-time record of 1,167, with 85% of those new products actively managed. The industry is not simply growing. It is restructuring itself in real time, and the numbers tell a story that every advisor needs to understand.
This overview assembles the essential data points into one reference: total assets, fund counts, ownership demographics, retirement allocations, fee trends, and the active-to-passive shift. Each section pairs the raw figures with the practitioner context that transforms data into insight.
Industry Assets: The Headline Numbers
The combined assets of U.S. mutual funds and ETFs reached approximately $44.9 trillion at year-end 2025. Mutual funds accounted for roughly $31.4 trillion of that total, while ETFs contributed $13.5 trillion.
Table 1: U.S. Fund Industry Assets (Year-End 2025)
| Category | Total Net Assets | Year-Over-Year Change |
|---|---|---|
| Mutual funds (all types) | $31.4 trillion | +3% |
| Exchange-traded funds | $13.5 trillion | +30% |
| Combined total | $44.9 trillion | +11% |
| Breakdown by Management Style | Assets |
|---|---|
| Active mutual funds and ETFs | $17.4 trillion |
| Index mutual funds and ETFs | $19.3 trillion |
Two things stand out. First, the growth gap between ETFs and mutual funds has become dramatic. ETF assets grew by approximately $3.2 trillion in 2025, powered by a record $1.49 trillion in net inflows. Mutual fund assets grew by less than $1 trillion, with much of that driven by market appreciation rather than new investor money. Second, indexed assets now exceed active assets, a milestone crossed for the first time in late 2024 and widening through 2025. By December, index funds held roughly $19.3 trillion compared to $17.4 trillion in active strategies.
The United States accounts for approximately 53% of worldwide regulated open-end fund assets, according to the ICI. Europe holds about 31% of assets but 42% of individual fund listings, reflecting a more fragmented market with smaller average fund sizes.
Fund Counts: Fewer Mutual Funds, More ETFs
While total assets have grown, the number of mutual funds available to investors has been declining. The U.S. had approximately 7,200 mutual funds as of the most recent complete count, down from a peak of roughly 8,000 in the mid-2010s. The number of fund sponsors dropped from 879 at year-end 2015 to 787 at year-end 2024. That net decrease of 92 masks significant churn: 433 new sponsors entered the market while 519 left.
ETFs tell the opposite story. An all-time record of 1,167 new ETFs launched in 2025, a 59% increase over the 757 ETF launches in 2024, which itself had broken the prior record. And the composition of new launches has shifted. Active ETFs accounted for 85% of new launches in 2025, and for the first time, the number of actively managed ETFs exceeded the number of passively managed ETFs on a fund-count basis.
Table 2: U.S. Fund Counts and Trends
| Metric | Value | Trend |
|---|---|---|
| Mutual funds | ~7,200 | Declining (from ~8,000 peak) |
| ETFs (primary listings) | ~5,000 | Record high (+1,167 in 2025) |
| New ETF launches (2025) | 1,167 | Record (85% active) |
| Mutual fund sponsors | 787 | Down from 879 in 2015 |
| Mutual-fund-to-ETF conversions (cumulative) | 190 | Accelerating (60 in 2025 alone) |
The mutual-fund-to-ETF conversion trend is worth watching separately. Since Guinness Atkinson completed the first conversion in 2021, approximately 190 mutual funds have converted to the ETF wrapper. Sixty of those conversions happened in 2025 alone, a record. The conversion wave reflects fund companies responding to investor demand for the ETF structure’s tax efficiency, intraday trading, and typically lower costs.
A parallel development may prove even more consequential. In November 2025, the SEC granted Dimensional Fund Advisors formal approval to offer both ETF and mutual fund share classes within the same fund structure. Over 80 asset managers, including BlackRock, State Street, JPMorgan, Schwab, and T. Rowe Price, have filed for the same relief. If widely adopted, dual-share-class structures would let existing mutual funds add an ETF share class without converting, giving investors access to the ETF wrapper’s tax efficiency while preserving the mutual fund class for retirement plan participants who need it. The line between “mutual fund” and “ETF” is blurring, and that blur will reshape how advisors think about product selection.
Who Owns Funds: Household Participation
The fund industry’s reach into American households is broader than many practitioners realize. According to the ICI’s 2025 survey, 56.4% of U.S. households owned shares of mutual funds or other registered investment companies (including ETFs, closed-end funds, and UITs). That represents approximately 76 million households and 128.7 million individual investors.
Table 3: Household Ownership of Mutual Funds
| Metric | 2025 |
|---|---|
| Households owning funds | 56.4% |
| Number of households | ~76 million |
| Individual investors | ~128.7 million |
| Median household income of fund owners | $125,000 |
| Fund owners with income under $150K | 61% |
That 56.4% ownership figure is up from 53.7% in 2024 and 52.3% in 2023, extending a steady climb from just 5.7% in 1980. The growth reflects the structural integration of funds into employer-sponsored retirement plans. Most fund-owning households hold their fund shares through 401(k) plans and IRAs rather than through brokerage accounts.
Ownership patterns are shifting across demographic lines as well. Among households that purchased their first mutual fund after 2019, 46% identify as Asian, Hispanic, or Black, more than three times the percentage of early adopters who bought their first fund before 1990. The diversification of the fund investor base has implications for how advisors communicate about these products and build relationships with newer investors.
Generationally, 59% of Baby Boomer households and 57% of Gen X households own mutual funds, but younger cohorts are catching up: 50% of Millennial households and 33% of Gen Z households now hold fund shares. That Gen Z figure is notable because most members of that generation are still early in their careers.
The Retirement Connection
The relationship between mutual funds and retirement savings is one of the most important structural features of the industry. At year-end 2024, $13.2 trillion in mutual fund assets, roughly 46% of all mutual fund assets, sat in retirement accounts. The fund industry is, in many respects, a retirement savings industry.
Table 4: Mutual Fund Retirement Assets (Q3 2025)
| Account Type | Total Assets | Mutual Fund Share |
|---|---|---|
| 401(k) plans | $10.0 trillion | 58% ($5.8T) |
| IRAs (all types) | $18.9 trillion | 38% ($7.3T) |
| Other DC plans (403(b), 457, TSP) | $3.9 trillion | Varies by plan |
Total U.S. retirement assets stood at approximately $48 trillion as of Q3 2025, including defined benefit plans, annuity reserves, and government programs alongside IRAs and defined contribution plans. The IRA and DC plan segments, where mutual funds have the deepest penetration, totaled roughly $32.8 trillion.
Within 401(k) plans, equity funds represent the largest allocation at $3.4 trillion, followed by hybrid funds (including target-date funds) at $1.6 trillion. Target-date funds deserve particular attention: Fidelity reports that 95.4% of its plans now default to target-date strategies, making these multi-asset funds the de facto entry point for new retirement savers. Because target-date funds are “fund of funds” structures that invest in underlying equity and bond funds, the assets they represent are somewhat distributed across other fund categories.
For advisors, the retirement connection means that much of what clients know (or assume) about mutual funds was shaped by their 401(k) experience. A client who spent 20 years auto-contributing to a target-date fund in their employer plan may have limited awareness of how fund selection, expense analysis, and tax-efficient placement work outside the default menu. The 401(k) brought them into the fund ecosystem; the advisor’s job is to help them use it more deliberately.
Fee Trends: The Compression Continues
Fund expenses have been declining for decades, and the trend accelerated in 2024. The asset-weighted average expense ratio across all funds fell to 0.34%, less than half the 0.83% investors paid in 2005. Equity mutual funds averaged 0.40%, down from 0.99% in 2000. Bond mutual funds averaged 0.38%, and money market funds just 0.12%. Investors saved an estimated $5.9 billion in fund expenses in 2024 alone, according to the ICI.
The gap between simple averages and asset-weighted averages reveals how investor behavior drives the cost trend. The simple average equity fund expense ratio was 1.10% in 2024, nearly three times the 0.40% asset-weighted figure. The difference exists because investors have overwhelmingly chosen lower-cost funds. At year-end 2024, funds with expense ratios in the lowest quartile held 81% of equity mutual fund assets. Gross sales of no-load funds rose from 46% of all long-term mutual fund gross sales in 2000 to 92% in 2024, a shift that tells its own story about where investor dollars are going.
Among the largest mutual funds, the cost gap between index and active strategies is stark. The median expense ratio for the 14 index funds among the 20 largest mutual funds is 0.05%. For the six active funds in that group, the median is 0.45%. That 40-basis-point gap compounds over investor lifetimes. An advisor who understands the long-term impact of expense ratios can quantify for a client exactly what that gap means in dollars.
Fee compression is driven by three forces. First, competition from index funds and ETFs has made cost transparency a baseline expectation. Second, the largest fund companies enjoy economies of scale that smaller firms cannot match, pushing smaller competitors to merge or close. Third, retirement plan fiduciary obligations have made expense ratio analysis a standard part of plan menu construction. That third force shows up clearly in the data: 401(k) participants who invested in equity mutual funds paid an average expense ratio of just 0.26% in 2024, well below the 0.40% industry-wide equity fund average. Plan sponsors are using their scale and fiduciary pressure to drive costs down for participants, and many employees now experience fund investing at price points that are hard to replicate in an individual brokerage account.
The Active-to-Passive Shift
The single most consequential structural trend in the fund industry is the migration from active management to index-based strategies. In late 2024, total assets in U.S. passive mutual funds and ETFs surpassed those in active strategies for the first time. By October 2025, the gap had widened: passive assets reached approximately $19.1 trillion compared to $16.2 trillion in active strategies.
Flow data tells the story even more sharply. In December 2025, long-term active funds experienced net outflows of $86.1 billion. In the same month, long-term index funds received net inflows of $162.8 billion. That pattern, with some variation in magnitude, has repeated itself in most months for the past several years. Over the five years through early 2024, investors added $3 trillion to index funds while withdrawing $1.4 trillion from active funds.
The performance data reinforces the flow trend. According to Morningstar, only 33% of active funds beat their average index fund counterpart during the twelve months ended June 2025, a period that included elections, tariffs, and significant geopolitical disruption. Over ten years, just 21% of active strategies survived and outperformed their passive peers. In U.S. large-cap equity, the most heavily scrutinized category, only 8% of active funds survived and beat their passive benchmark over the decade through June 2025.
Where the Numbers Break Down
Headline industry statistics are useful as orientation, but practitioners need to know where they mislead.
Total assets overstate the “investable” industry. The $31.4 trillion mutual fund total includes approximately $7.7 trillion in money market funds, which crossed the $7 trillion mark for the first time in March 2025 and surpassed $8 trillion by year-end. Money market funds serve a fundamentally different purpose than long-term investment vehicles, and their inclusion inflates the apparent size of the equity and bond fund landscape. When clients hear that “the mutual fund industry manages over $30 trillion,” they picture stock and bond portfolios, not cash equivalents. Strip out money market assets and long-term mutual fund assets are closer to $24 trillion. Advisors who make that distinction give clients a more accurate picture of the equity and bond fund market.
Fund counts are misleading because of share classes. A single fund offering three share classes (A, C, and Institutional) appears as three separate listings in many databases. The headline figure of roughly 7,200 mutual funds overstates the number of distinct investment strategies available. The actual number of unique portfolios is meaningfully lower.
Passive “dominance” is concentrated in certain categories. Index funds hold a commanding share of U.S. large-cap equity and investment-grade bond assets, but active management retains a much stronger position in less efficient markets. Active success rates are highest in fixed income, real estate, and small-cap categories, where information advantages and liquidity management create opportunities that passive replication cannot capture. Outside the United States, passive strategies represent only about 29% of fund assets. The “indexing wins everywhere” narrative is more accurately stated as “indexing wins in the most efficient markets.”
Household ownership data includes indirect ownership through retirement plans. The 56.4% headline figure counts households that own fund shares through a 401(k) even if those households have never made an active investment decision. A client who was automatically enrolled in a target-date fund technically “owns” mutual funds, but the depth of engagement varies enormously across that 76-million-household figure.
The Client Conversation This Data Enables
When a client asks a broad question about mutual funds or ETFs, the industry data in this article provides a framework for a substantive response. A few examples of where these numbers earn their place in an advisory practice:
The household ownership data is useful when a new client expresses hesitation about fund investing. Knowing that 56% of U.S. households own fund shares, and that the median income of fund-owning households is $125,000, reframes the conversation. Fund investing is not exotic or reserved for the wealthy. It is the most common way middle-income Americans build long-term wealth.
The retirement connection matters when guiding clients through rollovers. A client leaving an employer and rolling a 401(k) into an IRA may assume the same default options apply. Explaining that 58% of 401(k) assets are in mutual funds, often in target-date strategies selected by their plan sponsor, helps the client understand that their new IRA gives them access to the full fund universe, including the largest funds by assets and the companies that manage them.
The active-to-passive data is not an argument that clients should index everything. It is a framework for honest conversation about where active management is most likely to add value and where the odds are steepest. A client who understands that 92% of large-cap active managers trailed their benchmarks over ten years will ask better questions about which categories justify an active fee.
And the fee compression data gives advisors a concrete way to discuss costs without seeming adversarial. Showing that the industry’s asset-weighted average expense ratio has fallen from 0.83% to 0.34% over the past two decades demonstrates that the market works in investors’ favor over time, and that selecting lower-cost funds is a decision the data overwhelmingly supports.
The Advisor’s Edge
Every figure in this article is publicly available. The ICI publishes it. Morningstar tracks it. Any client with a search engine can find total industry assets, fund counts, and ownership percentages.
What is not publicly available is the ability to connect those figures to a specific client’s situation: to look at a retiree’s 401(k) rollover and understand what the shift from plan-selected target-date funds to individually chosen holdings means for tax efficiency, expense management, and income planning. To evaluate whether a client’s equity allocation belongs in index funds, where the performance data is most persuasive, or in actively managed strategies focused on less efficient markets where the odds are more favorable. To translate 40 basis points of expense ratio difference into the actual dollar impact on a specific portfolio over a specific time horizon.
Those analytical skills, the ability to move from industry data to client-specific guidance, are the foundation of the Certified Fund Specialist® (CFS®) designation. Advisors who develop them do not just cite the numbers. They use them.
Continue exploring the fund landscape: Largest Mutual Fund Companies by Assets Under Management
Sources and Notes: Industry asset data from the Investment Company Institute (ICI) Trends in Mutual Fund Investing (December 2025) and the 2025 ICI Fact Book. ETF flow and launch data from ICI, iShares, FactSet, and ETF.com year-end 2025 summaries. Household ownership data from the ICI Ownership of Mutual Funds and Shareholder Sentiment survey (2025). Retirement data from ICI Quarterly Retirement Market Reports (Q3 2025). Active vs. passive performance data from the Morningstar Active/Passive Barometer (mid-year 2025) and the SPIVA U.S. Scorecard. Expense ratio data from ICI Trends in the Expenses and Fees of Funds (2024). Fund count and sponsor data from ICI and SEC registered fund statistics. Dual-share-class regulatory developments from SEC exemptive order filings (2025). This article is refreshed annually with year-end data, typically in January or February.