U.S. ETF launches on record pace in 2026, led by leveraged funds

2026-08-12

New launches top 1,000

U.S. ETF launches reached 1,029 in the first seven months of 2026, according to Morningstar. That puts the market on track to exceed last year's record 1,236.

Leveraged funds drive growth

Leading the increase are leveraged ETFs that aim to deliver two or three times the move in individual stocks. By the end of July, 266 such funds had been launched, accounting for roughly one-quarter of all ETFs created in the United States. In addition to the triple- and double-leveraged products that have drawn strong interest in the S&P 500 and the Nasdaq Composite, the launch of single-stock products has stood out since 2025. Daisuke Motori, head of research at Morningstar Japan, said competition is intense among major providers in index-tracking funds and newer entrants are 'rolling out more risky, more distinctive products one after another.'

Concerns over volatility

Korgi Invest, a new asset manager founded in 2025, now offers 197 products, including 125 leveraged funds, and has also filed for additional ETFs with the U.S. Securities and Exchange Commission (SEC). Leveraged ETFs mainly use total return swaps to build positions equal to two or three times net assets. When money flows in, they can lift markets through demand for underlying shares, while daily rebalancing can also generate trend-following trades that amplify volatility. Goldman Sachs' Alvin So warned that even if financial stress across the market appears contained, the buildup of leverage could become a risk when volatility picks up.

Single stocks can swing sharply

In South Korea, the situation changed abruptly after the first single-stock leveraged ETFs on Samsung Electronics and SK Hynix were listed in late May, as a global AI stock correction hit the market. South Korea's Financial Services Commission (FSC) in July tightened rules on single-stock leveraged ETFs and raised the minimum deposit from 10 million won to 30 million won. The two stocks, which had attracted strong inflows, slumped after July and are now down 20% and 40%, respectively, from the end of June. In the United States, some ETFs have even been wiped out by sharp share-price declines. A double-leveraged ETF tied to U.S. electric vehicle maker Lucid Motors briefly fell to a negative value on July 14 after a steep drop, and trading was suspended while delisting procedures move ahead.

Assets under management reach $15.7 trillion

Assets under management across all U.S. ETFs have risen to $15.7 trillion, roughly double the level at the end of 2023. While they continue to draw support as low-cost products that are easy to use for building wealth, the rapid expansion of leveraged funds is making the role they play in amplifying market swings increasingly clear.

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