ETFs come of age

Global ETF assets under management hit a record $23.09 trillion at the end of June 2026, according to ETFGI, a London-based independent research firm that has tracked the industry since 2012. BlackRock’s iShares accounts for 27% of that total, or $6.2 trillion – a figure that would have seemed fantastical when BlackRock acquired iShares from Barclays Global Investors in 2009 for $13.5 billion, at a moment when the entire platform held only $300 billion in assets and the firm was navigating the wreckage of the global financial crisis.

Elise Terry was in sales at BlackRock when that deal closed. She did not foresee the scale to which the ETF business would eventually grow – few people on Wall Street did, save perhaps her boss, BlackRock co-founder and chief executive Larry Fink – but she saw something else: a structural solution to problems that had plagued investors for decades.

“ETFs solved real problems for investors: lower costs, greater transparency, liquidity, and tax efficiency,” Terry says. “As investing became more outcome-oriented and advisors increasingly built portfolios instead of picking individual securities, ETFs became the natural vehicle.”

In other words, the ETF didn’t change investing. It changed how investing gets delivered.

It also changed the trajectory of Terry’s career. She rose through BlackRock’s ranks over the next two decades to become co-head of the Americas for global product solutions and head of Americas iShares – a division that now accounts for approximately 40 percent of the firm’s $15.3 trillion in total assets under management, according to BlackRock’s second-quarter 2026 earnings results. She is the public voice of the platform for advisors, institutions, and individual investors alike, overseeing a product suite that now spans index ETFs, active fixed income, options-based outcome strategies, and liquid alternatives.

“I certainly didn’t map out my career thinking I’d one day lead iShares. I’ve been fortunate to grow alongside this business, learning from incredible colleagues and, most importantly, from our clients. Today, what stands out to me isn’t the prominence of the role – it’s the responsibility,” Terry says.

LET IT FLOW – AND ACTIVELY SO

iShares led global ETF industry inflows in the first half of 2026, gathering a record $310 billion in net inflows for the period. That result came atop a record first quarter of $132 billion, with active ETFs contributing more than $70 billion in net inflows over the trailing 12 months – cementing iShares as the third-largest active ETF issuer globally.

Terry believes the sustained move into ETFs is considerably larger than a market cycle. In her view, investors are choosing ETFs as their preferred investment vehicle because they combine efficiency with flexibility – a pairing that has made them central to long-term portfolio construction across every client channel, from individual retail investors to the largest sovereign wealth funds. BlackRock’s November 2025 “People and Money” survey of more than 5,000 US adults found that an estimated 24 million Americans now own ETFs, representing roughly 23% of all investors in the country.

At the same time, the use cases for ETFs continue to expand. Strategies like the BINC iShares Flexible Income Active ETF – launched in 2023 and managing approximately $16.2 billion in assets as of late July 2026 – demonstrate the surging demand for active fixed income management delivered through the ETF structure. The IALT iShares Systematic Alternatives Active ETF, launched in December 2025, reflects a different kind of expansion: making hedge fund-style alternative strategies – equity market neutral, managed futures, and diversified bonds – accessible to investors at institutional scale through a daily-liquidity wrapper.

“The story isn’t that investors are buying more ETFs – it’s that they’re building more portfolios with ETFs. And that shift has years, not quarters, ahead of it,” Terry says.

The trend toward actively managed ETFs has complicated the industry’s traditional narrative around cost. Passively managed ETFs were the standard when the structure was introduced in the early 1990s and have been celebrated for driving fees toward zero. Active ETFs carry higher expense ratios – BINC charges 0.52%, IALT 0.25% – and have attracted scrutiny from those who see their growth as diluting the original value proposition of the ETF wrapper.

Terry does not see it that way.

“Investors have become much more discerning about fees, recognizing that you should pay less for beta and pay for alpha only when it’s truly differentiated. Active ETFs make that possible while preserving many of the structural advantages that made ETFs so compelling in the first place,” she says.

BETTER INNOVATION, NOT SIMPLY MORE PRODUCTS

The global ETF industry comprised 17,404 ETFs as of the end of June 2026, according to ETFGI’s June 2026 report – a figure that stands in stark contrast to the roughly 1,100 funds that were trading when BlackRock purchased iShares in 2009. The expansion has not been universally welcomed. Some market participants argue that the proliferation of funds – many of which attract minimal assets and trade thinly – is unhealthy for the industry and ultimately disorienting for investors.

Terry acknowledges the tension but does not frame it as a critical problem.

In her view, the next chapter for ETFs will be defined by better innovation, not simply more products. Investor needs are evolving, creating legitimate room for new solutions – but not every investment idea belongs in an ETF wrapper.

“At iShares, we focus on strategies with a clear client need, strong investment merit, and a structure that works well in the ETF wrapper. Success is not measured by how many ETFs you launch, but by how many investor problems you solve,” Terry says.

The reference point she has in mind is easy to name. With approximately $900 billion in assets as of mid-2026, the IVV iShares Core S&P 500 ETF has become one of the most trusted investment vehicles in the world – held by institutions, financial advisors, and individual investors alike as a low-cost, tax-efficient core equity holding that consistently delivers what it promises. Terry stresses that she protects that trust by obsessing over execution every day, from index-tracking precision to liquidity management and tax efficiency.

“In our business, trust compounds faster than returns. That’s the moat we’re focused on protecting,” she says.

LEVERAGED ETFS, IVV, AND IQQ

One area where iShares has taken a deliberate stand is leveraged ETFs – the high-octane, daily-reset products offered by competitors like ProShares and Direxion that amplify both gains and losses by a fixed multiple each trading day. BlackRock has not built a traditional daily leveraged ETF, and under Terry’s stewardship, the firm shows no urgency to do so.

Instead, in January 2025, BlackRock launched the TWOX iShares Large Cap Accelerated Outcome ETF – a meaningfully different structure. TWOX uses a quarterly options strategy to target approximately twice the upside of IVV up to a defined cap, while seeking to track IVV’s downside one for one. It is not a traditional leveraged ETF: it does not reset daily and it does not amplify losses. The distinction matters considerably for long-term holders.

“We believe complex strategies should have a clear investment purpose and investors should fully understand how they’re expected to behave,” Terry says. “That’s why we’ve taken a different approach with products like TWOX, which was designed around a specific investment outcome rather than daily leverage. Innovation isn’t about complexity – it’s about clarity. We’ll continue expanding where we believe we can improve investor outcomes.”

On the competitive front, this summer BlackRock launched the IQQ iShares Nasdaq 100 ETF – entering one of the most contested corners of the ETF market with a 0.10% expense ratio, undercutting Invesco’s QQQ Trust at 0.18% and its institutional share class QQQM at 0.15%. IQQ joins State Street’s SPDR Portfolio Nasdaq 100 ETF (QNDX), which launched in June 2026, as the second significant challenger to Invesco’s decades-long grip on Nasdaq-100 index fund flows.

“Cost will always matter, but it’s only one part of the value proposition. We launched IQQ to provide investors with efficient access to one of the world’s most important equity benchmarks, while also expanding a broader Nasdaq toolkit,” Terry says.

BLACKROCK TO THE FUTURE

Looking ahead, Terry sees two emerging growth vectors that could significantly expand the number of Americans participating in capital markets through iShares ETFs.

The first is Trump Accounts – the tax-advantaged children’s savings vehicles created under the One Big Beautiful Bill Act, signed on July 4, 2025, and opened for contributions on July 4, 2026. Under the program, children under 18 whose funds are in the growth phase must be invested in low-cost, broad US equity index funds or ETFs with annual expense ratios capped at 0.10%. The US Treasury’s initial approved fund list included the IVV iShares Core S&P 500 ETF and the ITOT iShares Core S&P Total US Stock Market ETF – both of which carry expense ratios of 0.03%. The BlackRock Foundation committed an additional $1 million grant to Invest America in March 2026 to support enrollment awareness campaigns for the program.

“We’re honored that IVV and ITOT were selected because they provide simple, diversified, low-cost building blocks for those beginning their investment journey,” Terry says. “The greatest investment isn’t just in markets – it’s in creating more informed, long-term investors.”

The second is the longer horizon: what eventually displaces the ETF as the industry’s dominant investment wrapper. Terry is clear that she does not expect the ETF to be unseated by a single successor. The future of asset management, in her view, is about expanding choice rather than replacing one structure with another.

“ETFs will continue to play a foundational role, but they’ll exist alongside SMAs, private markets, and increasingly tokenized assets, each serving different investor needs,” she says. “Our job is to give clients access to the right vehicle for the right objective. The future isn’t one wrapper winning – it’s giving investors better ways to access investment opportunities.”

From a sales rep who spotted a structural shift that most of Wall Street missed to the executive overseeing a $6.2 trillion platform that has reshaped how the world invests, Terry’s career arc tracks almost precisely with the arc of the ETF. Whether the next chapter belongs equally to both remains the industry’s most interesting open question.