Actively managed exchange-traded funds dominated new product launches in 2025, capturing 84% of the 1,132 ETFs brought to market during the year, according to research published by Cerulli Associates. The trend marks the third consecutive year of record ETF introductions and signals a structural shift in how asset managers are packaging investment strategies for wealth clients and institutions alike. Total ETF launches climbed from 752 the prior year, even as 208 funds—largely those holding less than $50 million in assets—were shuttered over the same period.
Net new flows into the ETF wrapper reached $1.5 trillion in 2025, surpassing the roughly $1 trillion recorded in 2024 and underscoring robust investor appetite for the structure. By year-end 2025, the U.S. ETF universe had swelled to $13.4 trillion in assets under management, reflecting a five-year compound annual growth rate of 19.6%. The data suggests that both retail and institutional allocators continue to favour the tax efficiency, intraday liquidity, and transparency characteristics that have long distinguished ETFs from traditional mutual fund vehicles.
Of the 953 actively managed ETFs launched last year, the majority employed strategies ranging from traditional stock-picking to systematic rules-based approaches, buffer structures, and covered-call overlays. Cerulli found that 83% of ETF issuers plan to introduce at least one active product this year, while 94% are either developing or intend to develop transparent active ETF offerings in the future. The appetite for active wrappers reflects issuer conviction that differentiated alpha generation—or at least the promise of it—can command higher fees and stickier assets than passive index replication.
Kevin Lyons, senior analyst at Cerulli, noted in a statement that the overall ETF ecosystem remains strong, with product development backed by tremendous flows and uptake across categories. He cautioned, however, that the rapid buildout of a range of in-demand solutions creates the risk of a closure wave. Aniket Ullal, senior vice president and head of ETF research and analytics at CFRA Research, echoed that concern, observing that many issuers are launching products knowing that all of their launches will not succeed and hoping that a successful few home runs can offset the failures.
Last year's closures disproportionately affected niche, thematic, and leveraged or inverse strategies that failed to attract sufficient advisor and investor interest. Funds with low assets under management were the first to be wound down, a pattern that mirrors historical mutual fund rationalisation cycles. A separate report from AdvizorPro covering the first quarter of 2026 found that registered investment advisers continued to add ETFs to their lineups but were seeking products that would fulfill specific roles within larger asset portfolios rather than overhauling their entire ETF allocations. In recent months, RIAs had been directing capital toward equity energy ETFs, broad-based commodities ETFs, natural resources ETFs, and products with embedded risk-management components.
Despite the surge in active launches, performance data present a mixed picture. Morningstar's Active/Passive Barometer for 2025 showed that only 38% of actively managed ETFs and mutual funds outperformed their asset-weighted passive composite over the measurement period. Over a ten-year horizon, an even smaller share—21%—beat their passive counterparts. Active strategies had the best chance of outperformance when focused on bond and real estate allocations, and were least successful in U.S. large-cap equity mandates, according to Morningstar's analysis.
Ullal also pointed out that some ETFs counted in the actively managed category employ buffer structures, covered-call overlays, or rules-based systematic strategies rather than discretionary stock selection, which may inflate the headline figures for active products. That definitional ambiguity complicates comparisons and suggests that allocators should scrutinise underlying methodologies before assuming a fund manager is exercising traditional active judgment on security selection and portfolio construction.
Asset composition within the ETF universe remained heavily skewed toward U.S. equities in the first quarter of 2026, with domestic stocks accounting for 61.1% of market share. International equities claimed 16.2% of ETF assets, up from 14.4% a year earlier, while taxable bonds also represented 16.2% of the total. Commodities, alternatives, and tax-free bonds occupied a combined 6.6% of the asset base, underscoring the degree to which equity and fixed-income exposures continue to anchor portfolios built around the ETF wrapper.