Experts advise investors to keep an eye on these trends in U.S. exchange-traded funds, which have surpassed $10 trillion in assets.

• The latest data from Cerulli Associates shows that U.S. exchange-traded funds have surpassed $10 trillion for the first time in November.
• Based on the latest data, here are some ETF trends that were prominent in 2024.

In November 2021, the value of assets in U.S. exchange-traded funds surpassed $10 trillion for the first time, according to Cerulli Associates' latest data.

In November, funds that invest in stocks, bonds or other assets and trade on national stock exchanges recorded $156 billion in inflows, surpassing the previous monthly flow records.

Cerulli reported that the activity is as high as it typically is at the end of the year.

In November 2021, U.S. funds, including ETFs and mutual funds, experienced a "Trump bump," taking in a record-breaking $115 billion, according to research from Morningstar.

Based on the latest data, these are the ETF trends that dominated 2024.

S&P 500 among 2024 fund winners

As of Monday, the S&P 500 index has increased by almost 24% year to date.

The Magnificent Seven stocks, including Apple, Microsoft, Google parent Alphabet, Amazon.com, Nvidia, Meta Platforms, and Tesla, contributed to about half of the S&P 500's gains for the year, according to VettaFi.

According to Cerulli, four of the top 10 ETFs for 2024 in terms of flows are indexed to the S&P 500.

According to Cerulli, the Bitcoin Investment Trust ranks No. 1 for 2024 year-to-date inflows, followed by iShares Bitcoin Trust, Invesco QQQ Trust, iShares Core US Aggregate Bond ETF, Vanguard Total Stock Market Index Fund, iShares Core S&P 500 ETF, and Vanguard Growth Index Fund.

Malcolm Ethridge, a certified financial planner and founder and managing partner at Capital Area Planning Group, frequently employs S&P 500 ETFs in client portfolios due to their ability to provide access to large-cap growth strategy company names at reduced costs.

A passive S&P 500 ETF may charge only 10 basis points, while an actively managed fund may charge 50 or 75 basis points, he stated.

The S&P 500 index, which has experienced a record streak, may maintain its momentum as it adjusts to reflect current market leaders.

Ethridge believes that in 2025, SPY is likely to outperform the majority of fund managers.

Kirsten Chang, senior industry analyst at VettaFi, stated that the S&P 500 may not achieve the "historically rare" double-digit gains we've seen in the past two years. According to her, the median S&P 500 forecast from Wall Street banks predicts high single-digit gains. Additionally, she noted that the Magnificent Seven and mega-cap technology companies that have driven recent gains may see their returns start to decline.

"Although investors will continue to value S&P 500 ETFs for their low fees and unmatched liquidity, I predict that the rapid pace of investment into broad-based vanilla funds may slow down in 2025," Chang stated.

Alternative ETFs see record growth

In November, Cerulli reported that alternative ETFs reached a new milestone of $400 billion in net assets.

The year-over-year asset growth rate for alternative ETFs was the highest among all asset classes at 93%.

Digital assets, trading-leveraged equity and derivative income ETFs account for approximately 80% of the total alternative ETF market share, which amounts to around $325 billion, according to Cerulli.

In 2024, financial advisors had a 3.6% allocation to alternatives, which is expected to rise, according to Cerulli. Out of the existing alternatives allocations, 14.4% is invested through ETFs, Cerulli found.

Crypto ETFs are 'here to stay'

In January, bitcoin ETFs began trading on U.S. exchanges.

Despite a "more lackluster" rollout for spot ethereum ETFs this year, crypto ETFs are "here to stay," according to VettaFi.

In 2024, the top five ETFs with the highest assets were all bitcoin ETFs, according to Cerulli, based on data up to November.

The top five Bitcoin ETFs are iShares Bitcoin Trust ETF, Fidelity Wise Origin Bitcoin ETF, ARK 21 Shares Bitcoin ETF, Bitwise Bitcoin ETF, and Grayscale Bitcoin Mini Trust ETF.

Financial advisors are increasingly discussing crypto with clients due to its growing institutional interest and adoption.

Despite advisors' own doubts about bitcoin, they recognize that discussing crypto with clients is now unavoidable, according to Chang.