The number of retail investors—individuals who invest their own money to save for retirement or meet other financial goals—participating in financial markets has grown significantly in recent years.1 As a result, retail trading in U.S.-listed ETFs has also increased, with trading volumes, measured by the number of ETF shares traded multiplied by the price of the ETF shares, growing at a three-year compound annual growth rate of 52% (Figure 1).
We believe the growth in retail investors’ use of ETFs has been driven by a few key factors, including an industry shift to commission-free trading, improved digital experiences on direct platforms, and investor empowerment stemming from greater access to financial education through social media and other forums. Below are some key statistics that illustrate how retail investors are engaging with the U.S. ETF market (Figure 2).
