Introduction:
The world of finance is buzzing, and the latest trend shaking up Wall Street is exchange-traded funds (ETFs). A host of big-name firms, from Lazard to Raymond James, are jumping on the ETF bandwagon, marking their first foray into this ever-expanding space. The ETF market is already a massive $15 trillion industry, but that’s not stopping these heavyweights from making their move.
But what makes ETFs so attractive? And why are so many firms suddenly eager to launch their own funds? Let’s break it down.
Why the ETF Market Is Booming: A $15 Trillion Opportunity
What Are ETFs and Why Do They Matter?
ETFs are a type of investment fund that’s similar to mutual funds but with a key difference: they can be traded on the stock market like individual stocks. This gives them some significant advantages:
- Tax efficiency: ETFs typically have lower capital gains taxes than mutual funds.
- Liquidity: They can be bought or sold anytime during market hours, unlike mutual funds, which only trade at the end of the day.
- Lower costs: Most ETFs have lower fees than mutual funds, making them appealing for cost-conscious investors.
For asset managers, the allure is simple. ETFs are attracting massive inflows from investors looking for an easier, cheaper way to invest. In 2023 alone, $1 trillion flowed into ETFs, while mutual funds saw $575 billion in outflows, according to data from the Investment Company Institute.
Wall Street’s Latest ETF Push: Who’s Joining the Frenzy?
Big Firms Jumping on the ETF Bandwagon
It’s no surprise that Wall Street’s biggest names are diving into the ETF pool. Firms that were once hesitant to launch their own ETFs are now jumping in headfirst. Here’s a look at the latest players:
- Lazard: The asset management giant is making waves with plans to launch five new ETFs and has already created a global ETF team to support the effort.
- Raymond James: Known for its strong presence in mutual funds, Raymond James is preparing to debut four new ETFs, signaling its first-ever push into the ETF space.
- Hotchkis & Wiley: Based in San Francisco, this investment firm filed to launch its first ETFs in early January 2025.
- Parnassus: A $46 billion asset manager, Parnassus made its ETF debut with two new funds at the end of 2024.
It’s clear: these firms are racing to join the ETF boom, which shows no sign of slowing down.
The ETF Frenzy: Why So Many Are Getting In
It’s About Growth and Diversification
The allure of ETFs is undeniable. Roughly 200 ETFs shut down last year alone, proving that not every fund will succeed. But despite the growing competition, the industry is attracting more players because of one key factor: growth potential.
Todd Sohn, an ETF strategist at Strategas, put it bluntly: “If you are an asset manager, you basically have to have an ETF product at this point. Otherwise, you are missing out on a potential massive amount of flows and clientele.” In other words, not having an ETF offering is quickly becoming a missed opportunity.
ETFs are particularly attractive to newer investors who prefer the flexibility of trading throughout the day and the lower fees that ETFs offer compared to traditional mutual funds. By offering ETFs, firms can tap into this younger, more dynamic investor base and diversify their revenue streams.
The Record-Breaking Growth
The ETF market saw more than 700 new funds debut last year — a new all-time high. That’s a clear sign that the competition is heating up, but also that there is plenty of room for more. Big names like Bridgewater Associates and Apollo Global Management are getting in on the action too, having filed for their own ETFs. Even MFS Investment Management, the firm that pioneered the mutual fund, jumped into the ETF space in 2024.
In addition to gaining access to a broader range of investors, launching ETFs gives firms a way to build brand recognition and expand their market presence.
The Competitive Landscape: Challenges and Rewards
Not All ETFs Succeed
While the ETF market is growing fast, success is far from guaranteed. The competition is fierce, and many new ETFs simply don’t make the cut. In fact, more than 220 ETFs shut down in 2023, and roughly 200 closed in 2024.
For asset managers looking to stand out, it’s not enough to just launch an ETF. They need to offer something different—whether that’s a unique investment strategy, a niche market focus, or a more aggressive marketing approach.
It’s a challenge that’s forcing firms to get creative. “More original products” and better distribution channels are key to succeeding in the crowded ETF space, says Roxanna Islam, head of sector and industry research at TMX VettaFi. Firms are realizing that launching an ETF is just the beginning—getting it into the hands of investors is what truly matters.
What’s Next for the ETF Market?
An Even Bigger Opportunity
Despite the stiff competition, the potential for growth in the ETF space is still massive. With more and more firms hopping on the bandwagon, the market continues to expand. Experts say the industry’s growth trajectory is likely to continue, as ETFs offer more flexibility, lower fees, and greater ease of access for investors.
As the ETF landscape evolves, asset managers will continue to innovate, launching new products and strategies to meet the ever-growing demand. For investors, the key takeaway is simple: keep an eye on the ever-expanding world of ETFs, as it could be the easiest and most cost-effective way to grow your wealth in the coming years.
Conclusion: Why ETFs Are the Future of Investing
It’s clear that ETFs are not just a passing trend—they’re the future of investing. From the surge in inflows to the increasing number of asset managers diving in, ETFs are becoming the go-to product for both firms and investors. Whether you’re a seasoned investor or just starting, understanding the ETF space and its growing influence is crucial.
Big-name firms like Lazard, Raymond James, and Hotchkis & Wiley are all betting on ETFs as the next big thing in finance. As more players enter the market, competition will only grow, but so will the opportunities for savvy investors looking to capitalize on this $15 trillion industry.

I am Aparna Sahu
Investment Specialist and Financial Writer
With 2 years of experience in the financial sector, Aparna brings a wealth of knowledge and insight to Investor Welcome. As an accomplished author and investment specialist, Aparna has a passion for demystifying complex financial concepts and empowering investors with actionable strategies. She has been featured in relevant publications, if any, and is dedicated to providing clear, evidence-based analysis that helps clients make informed investment decisions. Aparna holds a relevant degree or certification and is committed to staying ahead of market trends to deliver the most up-to-date advice.