The ETF universe has quickly expanded, attracting $3.5 trillion in assets under management in the U.S., and the growth is not showing any signs of letting up.

“While we all know the basic tenants behind the increase in popularity of passive and ETFs, we have to view this in the context of the market environment we have been in. We have seen nine years of a bull market with increasingly low volatility,” Luke Oliver, Head of U.S. ETF Capital Markets for DWS, said in a research note.

The S&P 500 has gained 250% since 2008, the sudden growth of the U.S.-listed ETF industry from $1 trillion to $4 trillion may be partially explained by equity market appreciation alone.

“We feel this is a perfect scenario for passive strategies as active managers have limited opportunity to outperform a steadily increasing benchmark. These challenges and the low cost associated with passive has attracted the lion‘s share of asset flows. If volatility returns it’s possible we see investors reverse some of these flows back towards active managers that perform, but the ETF wrapper is here to stay,” Oliver added.

Related: ETF Industry Punched With Big Monthly Outflows

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