Investment firms are on track to launch a record number of exchange traded funds (ETFs) in 2026, with more than 1,000 new funds introduced as of mid-July. This figure is approaching the previous full-year record of 1,161 ETFs set in 2025, underscoring a significant surge in launches driven by firms seeking to capitalize on the latest market trends.

Data from Morningstar shows that these new ETFs include offerings that provide leveraged exposure to equity indices and individual stocks. The rapid proliferation of these funds reflects a broader investor appetite for thematic and niche investment strategies, moving beyond traditional index tracking. Notably, several lesser-known providers with limited track records are aggressively entering the market, attempting to replicate the rapid success of vehicles like the Roundhill Memory ETF and the iShares Bitcoin Trust. These funds attracted billions of dollars in assets shortly after launch by offering exposure to popular themes such as artificial intelligence and cryptocurrencies.

“The spaghetti cannon is firing wildly right now and not even hitting the wall in some instances, let alone sticking,” remarked Bryan Armour, director of passive strategies research for North America at Morningstar, highlighting the scattershot nature of these launches.

The US market remains the dominant arena for ETF growth, benefiting from tax advantages compared to traditional mutual funds. Net inflows into US-listed ETFs surpassed $1 trillion during the first half of the year, with State Street Investment Management projecting total inflows of approximately $2.3 trillion for 2026—significantly above last year’s $1.5 trillion and about four times the annual amount typical in the early 2020s.

Some funds have experienced extraordinary growth. The Roundhill Memory ETF, which concentrates on a narrow selection of chipmakers with significant exposure to AI-related companies, attracted $10 billion in assets within just 50 days of launch.

Certain firms are taking a high-volume approach to fund launches. Corgi Funds, a venture capital-backed startup that began operations last December, has introduced 188 ETFs, featuring unique themes such as Coffee and Energy Drinks, Buy Now Pay Later, and War Machine, as well as leveraged exposures to Chinese internet and East Asian stocks. Corgi has filed for permission to launch an additional 360 funds, positioning itself to surpass BlackRock as the issuer with the most US ETFs by number. However, BlackRock remains far ahead in assets under management within its US ETF business, holding about $4.5 trillion compared to under $1 billion for Corgi.

Anthony Crinieri, a portfolio manager at Corgi, acknowledged that not all funds will succeed but predicted that roughly 20% of their launches would attract about 80% of the company’s assets, a model designed to ensure profitability despite numerous launches.

A notable trend this year is the rise in leveraged single-stock ETFs, which account for nearly 25% of new funds—up from 20% last year and just 4% in 2024—indicating growing investor interest in riskier, more volatile bets. Providers like Leverage Shares, GraniteShares, Defiance ETFs, and T-Rex have introduced such products, offering double daily exposure to stocks including SpaceX and SK Hynix. Morningstar’s Armour described leveraged single-stock ETFs as generally poor long-term investments, though investor interest often spikes during periods of strong price momentum.

Beyond leveraged products, new ETFs launched this year encompass a variety of actively managed, thematic, and derivatives-based strategies, such as buffer ETFs that provide partial downside protection. Traditional broad-market index trackers represent a shrinking share of recent launches.

“There is some craziness in the launches that have come to market and then there are some lower-cost alternatives to established benchmarks as well,” said Todd Rosenbluth, head of research at TMX VettaFi, referencing new competitors to major ETFs like Invesco’s $470 billion Nasdaq 100-tracking QQQ.

Todd Sohn, chief ETF strategist at Strategas Asset Management, pointed out the proliferation of similar thematic funds, noting that the market often sees multiple ETFs targeting the same niche, such as semiconductor memory or photonics.

Investors are increasingly favoring ETFs over mutual funds due to their transparency, ease of trading, lower fees, and expanding investment options. Although roughly 6,000 ETFs are currently listed in the US, this number remains below the 8,030 mutual funds available as of last year, suggesting considerable room for ETFs to continue their rapid growth.

Looking ahead, Sohn highlighted the likelihood of numerous new thematic ETFs focused on artificial intelligence and predicted that, if approved by the Securities and Exchange Commission, ETFs based on prediction markets could significantly increase the number of available products in the space.