Move over hedge funds. Exchanges trade funds are now larger based on combined assets under management. The more than 5,800 exchange traded products listed around the world have a combined $2.971 trillion in assets under management, just ahead of combine AUM of $2.969 trillion for hedge funds.

“According to our analysis there was US$2.971 trillion invested in the 5,823 ETFs/ETPs listed globally at the end of Q2 2015, assets were down slightly from their record high of US$3.015 trillion at the end of May 2015, while assets in the global hedge fund industry, according to a new report published by Hedge Fund Research HFR, reached a new record high of US$2.969 trillion invested in 8,497 hedge funds, which is US$2 billion smaller than the assets in the global ETF/ETP industry,” said ETFGI, a London-based ETF research firm, in a note out Tuesday.

In late April, ETFGI correctly predicted ETFs were poised to top hedge funds in terms of assets under management. [ETFs Almost Bigger Than Hedge Funds]

“This is a significant achievement for the global ETF/ETP industry, which just celebrated its 25th  anniversary on March 9th while the hedge fund industry has existed for 66 years. Below is a chart which illustrates how the assets in the ETF/ETP industry have been gaining on the assets invested in the hedge fund industry, more notably since the financial crisis in 2008,” adds ETFGI.

While hedge funds remain popular with select institutional investors, ETFs are getting their fair share of institutional money and that share is expected to grow.

A recent survey conducted by Invesco’s (NYSE: IVZ) PowerShares unit, the fourth-largest U.S. ETF issuer, and Market Strategies International, shows that use of smart beta ETFs by professional investors continues climbing.

Sixty-four percent of institutional usage of smart beta ETFs is currently concentrated to dividend funds, a number that is expected to rise to 67% over the next three years, according to PowerShares. Over the same period, institutional usage of fundamentally weighted ETFs is forecast to rise to 68% from 61% while professional adoption of low volatility is expected to surge to 71% from 57% today. [Business is Booming for Smart Beta ETFs]

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