In the last decade, the Exchange-Traded Fund (ETF) market has witnessed a remarkable surge, evolving into a dominant investment vehicle globallyThe trend is characterized by a widening gap in performance among major players, with stronger entities consolidating their positionsBy the end of 2021, the number of ETFs worldwide reached a staggering 9,877, managing assets worth $10.3 trillionThis marked a 28.5% year-on-year increase, signifying robust growth in investor interest and market penetration.

The growth momentum continued amid the financial fallout from the COVID-19 pandemicCountries around the world extended easy monetary policies to mitigate the economic impact, leading to unprecedented capital inflows into ETFsThe year 2021 recorded net inflows of $1.3 trillion into the ETF market, a 70% increase from 2020's figure of approximately $762.87 billion

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This influx was largely driven by equity ETFs, which accounted for $910.16 billion of these net inflows, exhibiting a remarkable growth of 148.9% year-on-year and representing over 70% of the total net inflow volumeMeanwhile, fixed-income ETFs saw net inflows of $238.95 billion, a more modest increase of 3.6%, while commodity ETFs faced a significant outflow, with a net loss of $10.17 billion as compared to a gain of $61.25 billion in the prior year.

As of the end of 2021, ETFs categorized by asset class showed a clear dominance of equity-based products, which held a significant share of 75%. In contrast, fixed-income and commodity ETFs accounted for 19% and 3.4% respectivelyThe largest equity ETF was the SPDR S&P 500 ETF, which had an astonishing scale of $355.1 billion as of April 29, 2022. The largest fixed-income ETF was the iShares Core U.S

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Aggregate Bond ETF with a size of $82.6 billion, while the leading commodity ETF was SPDR Gold Shares at $67.2 billion.

The historical evolution of ETFs traces back to 1993, with the inception of the SPDR S&P 500 ETF, which is now known to be the largest equity ETF in the worldOver nearly three decades, ETF assets have seen significant growth, with the fund size surpassing the $1 trillion mark for the first time in 2009, reaching $2 trillion by 2013, and hitting $3 trillion in 2016. This growth trajectory accelerated remarkably, with successive breakouts at $4 trillion in 2017, $6 trillion in 2019, and a record high of $7.21 trillion by the end of 2021.

However, the global ETF market showcases a pronounced Matthew effect, where established markets in the U.Sand Europe continue to dominate and enhance their positions

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The distribution of ETF assets reflects a heavy concentration in these regions, particularly in the U.S., which remains the largest market by a considerable margin.

As of the end of 2021, the U.Shad 2,805 ETF products managed by 234 issuers, with a total market size of $7.21 trillion, representing an impressive 70.2% of the global ETF marketEurope ranks second with 2,616 products across 89 issuers, managing a total of $1.60 trillion, up 24.7% from the previous yearIn the Asia-Pacific region, there were 218 issuers and 2,308 products, with a market size of approximately $543.1 billion, accounting for about 5.3% of the global total.

Focusing on the U.Sdata specifically, as of May 23, 2021, out of the ETF universe, 2,146 ETFs managed assets exceeding $6.25 trillion, which constitutes roughly 80% of all globally managed ETF assets

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Furthermore, 128 ETFs with assets exceeding $10 billion represent $4.66 trillion, which is about 75% of the total managed by the U.SETFsThis phenomenon illustrates the significant trend of capital concentration towards larger, more established ETFsThe rise of ETFs has become the driving force behind the U.Sfund industry, a trend that intensified post the 2008 financial crisis, with equity-oriented mixed ETFs leading the charge, which amassed roughly $3.6 trillion, accounting for 86% of the entire U.Sequity ETF market by the end of 2021.

In Europe, Ireland stands out as a major hub for ETF activities, holding the second-largest ETF market globally with a size of $960.3 billion by the end of 2021, following the U.SAlthough Europe’s overall ETF market size was $1.60 trillion during the same period, commodities ETFs were notably more popular in this region, comprising 9% of the total, compared to a mere 2% in the U.S