Although the U.S. ETF industry is considered to be in its infancy by some measurements, its annual growth rates indicate a certain level of maturity. Gone are the days of 70% product growth and 50% asset growth. Despite the strong market of the past five years and record inflows, product quantity growth is averaging less than 10% a year and asset growth is hovering in the 20% range.

The accompanying chart illustrates the annual growth rates for each of the past 10 years. Starting with product quantity, the number of listed ETFs and ETNs exploded from 382 to 1,964 over the past 10 years. However, most of that growth occurred in the first half of that 10-year span, when the product count more than tripled from 382 to 1,369. The most recent five-year period resulted in a cumulative growth of 43%, which works out to an annualized growth rate of just 7.5%.

Asset growth has been a better story, at least during the recent bull market years. Asset growth consists of two components: (1) net inflows and (2) market gains. However, asset growth rates have a third component—the size of the starting base. As the industry continues to grow, it gets harder and harder to sustain large growth rates. Calendar year 2007 had all three components working in its favor to produce an impressive 47% growth rate, which was repeated in 2009. The intervening year of 2008 saw market losses swamp out the inflows, resulting in a 13% drop in assets.

For the year just ended, the U.S. ETF industry reported record inflows of $293 billion. Market gains added another $143 billion for an overall asset gain of $436 billion. Clearly an impressive accomplishment in terms of asset gains, it represented a somewhat less impressive 19.7% asset growth rate. That’s because its base had grown to $2.1 trillion at the end of 2015. With an asset base of more than $2.5 trillion now, future asset growth rates in excess of 20% will be even harder to achieve.

Therefore, predictions of annualized asset growth north of 20% a year on a sustained basis appear to have little merit. Sure, there could be a year in our future when inflows and market gains combine to produce a growth rate north of 20%, but doing so on a sustained basis becomes more difficult as the size of the base increases every year.

Some analysts have been forecasting a massive conversion of open-end mutual funds into ETF structures. That hasn’t happened yet, but if it does, then it could produce a one-off event that appears as a gigantic growth spurt. However, that again will push the asset base even higher, reducing future growth rates even further.

Disclosure: Author has no positions in any of the securities mentioned and no positions in any of the companies or ETF sponsors mentioned. No income, revenue, or other compensation (either directly or indirectly) is received from, or on behalf of, any of the companies or ETF sponsors mentioned.