ETF Market Sees Dynamic Shifts with New Launches and Strategic Adjustments

Vanguard Introduces Emerging Markets ETF Excluding China

Vanguard Group has announced plans to launch the Vanguard Emerging Markets ex-China ETF, targeting emerging markets while excluding China. This move addresses investor concerns about China’s geopolitical risks and market interventions. The fund is expected to debut later in the summer of 2025, offering substantial exposure to companies in Taiwan and India, which together make up nearly 60% of the index. The ETF will charge a competitive 0.07% fee, providing an option for investors seeking to minimize exposure to China while maintaining emerging market investments. Vanguard files for new ex-China emerging markets ETF

ARK 21Shares Bitcoin ETF Announces 3-for-1 Share Split

21Shares US has announced a 3-for-1 share split of the ARK 21Shares Bitcoin ETF (ARKB.Z), effective at market open on June 16, 2025. This move aims to enhance affordability and accessibility for retail investors by reducing the price per share while maintaining the ETF’s net asset value, ticker symbol, and investment strategy. The decision follows the U.S. Securities and Exchange Commission’s January 2024 approval of spot bitcoin ETFs, a milestone that has legitimized digital assets and attracted significant inflows. ARKB has seen strong performance, increasing nearly 12% year-to-date and about 27% in the current quarter, closing at $104.25 on Monday. ARK 21Shares Bitcoin ETF to undergo 3-for-1 share split on June 16

Investment Managers Criticized Over ‘Shy Active’ ETFs

A significant number of investment managers are facing criticism for promoting exchange-traded funds (ETFs) as actively managed while closely mirroring benchmark indices, a practice termed “shy active” by Morningstar. A Carne Group survey found that 88% of wealth managers and institutional investors believe these ETFs fail to meet their active management claims. Many of these funds engage in minimal deviations rather than employing traditional stock-picking strategies. Transparency concerns, especially due to European regulations mandating daily portfolio disclosures, have impeded the launch of genuinely active ETFs, as managers fear revealing proprietary trades. However, new semi-transparent structures introduced in Luxembourg and Ireland are expected to encourage truly active fund strategies by protecting trade confidentiality. Investment managers accused of misleading market over ‘active’ ETFs

Global Investors Launch European Defense ETFs Amid Rearmament

In response to escalating geopolitical tensions and increased defense spending by European governments, major global asset managers such as BlackRock and BNP Paribas have launched new exchange-traded funds (ETFs) focused on Europe’s defense industry. These funds aim to capitalize on the continent’s rearmament efforts, spurred in part by U.S. President Donald Trump’s calls for Europe to become less reliant on American military support. Over the past seven months, at least nine Europe-focused defense ETFs have been introduced, a recent trend in a market that already offers more than 50 defense ETFs globally. So far in 2025, investors have injected $8.4 billion into defense ETFs, with $2.7 billion directed toward the European-focused variants, more than double the total investment for all of 2024. Global investors launch Europe defence funds to profit from rearmament

ETF Market Faces Potential Challenges After Record Inflows

In 2024, U.S. exchange-traded funds (ETFs) experienced record inflows of $1.1 trillion, nearly doubling the $597 billion from the previous year. Analysts attribute this growth to a bullish market, innovative products in cryptocurrencies and options, and investors’ preference for low-cost, high-liquidity ETFs. However, in 2025, the industry could face challenges such as market saturation and the difficulty of attracting investors to complex products. A record number of ETF closures is expected, surpassing the 186 liquidations of 2024. Despite these challenges, the sector remains optimistic, reaching $14 trillion in global assets by the end of 2024, with a significant increase in new ETF launches, including products based on bitcoin and risk management strategies. ETFs could face obstacles in 2025 after bumper year

Capital Group Enters Active ETF Model Portfolio Market

Capital Group, the largest active asset manager globally, is entering the active ETF model portfolio market with eight model portfolios made entirely of its own active ETFs. This move aligns with a growing trend where financial advisers prefer pre-constructed model portfolios to streamline their investment processes. These portfolios, which match specific risk levels or investment goals, are increasingly popular in the US. Capital Group’s new offerings leverage their 22 ETFs, which have garnered $53 billion in assets. By utilizing ETFs, advisers benefit from lower fees and increased tax efficiency compared to mutual funds. The model portfolio market, valued at $2 trillion in the US, is traditionally dominated by broker-dealers but is seeing a shift towards asset manager and third-party operated portfolios. Capital Group wades into active ETF model portfolio market

China Considers Opening ETF Market to Western Market Makers

China is considering granting access to Western firms like Citadel Securities, Jane Street, and possibly Optiver to operate as market makers in its $520 billion exchange-traded fund (ETF) market. This move could enhance trading efficiency and reduce costs due to the experience international firms bring in providing ETF liquidity. Over the past two years, China has expanded its ETF sector significantly, growing 134% to become Asia Pacific’s second-largest behind Japan. Despite the growth, ongoing U.S.-China trade tensions, including recent U.S. tariffs of 145% on Chinese goods, may delay approval for U.S. firms. Market makers offer continuous buying and selling prices for ETF shares, enabling smooth trading, and licensed market makers in China benefit from reduced fees and trading restrictions. China has considered opening its $520 billion ETF market to Western market makers, sources say

Current Performance of Major ETFs

As of June 2, 2025, major ETFs have shown the following performance:

• SPDR S&P 500 ETF Trust (SPY): $592.71, up 0.55% from the previous close.
• Invesco QQQ Trust Series 1 (QQQ): $523.21, up 0.79% from the previous close.
• iShares Russell 2000 ETF (IWM): $205.71, up 0.35% from the previous close.
• SPDR Dow Jones Industrial Average ETF (DIA): $423.71, up 0.21% from the previous close.
• iShares MSCI Emerging Markets ETF (EEM): $45.85, up 0.76% from the previous close.
• SPDR Gold Shares ETF (GLD): $311.67, up 2.65% from the previous close.
• iShares Silver Trust (SLV): $31.59, up 5.30% from the previous close.
• iShares 20+ Year Treasury Bond ETF (TLT): $85.16, down 1.32% from the previous close.
• iShares iBoxx USD High Yield Corporate Bond ETF (HYG): $79.18, down 0.48% from the previous close.
• iShares iBoxx USD Investment Grade Corporate Bond ETF (LQD): $107.07, down 0.65% from the previous close.

These movements reflect the dynamic nature of the ETF market, influenced by various economic indicators and investor sentiments.

The ETF landscape continues to evolve with new product launches, strategic adjustments, and regulatory considerations. Investors are advised to stay informed and consider their investment objectives and risk tolerance when navigating this dynamic market.