Registered investment advisors continued their measured expansion of exchange-traded fund allocations through the first quarter of 2026, raising the average number of ETFs held per firm to 89.7 while demonstrating a clear preference for tactical exposure and downside protection. The data, drawn from 13F filings covering 5,304 RIA firms tracked by AdvizorPro over consecutive quarters, reveals a bifurcated market in which established fund giants are ceding ground to active managers and specialty-strategy issuers even as total ETF adoption accelerates. Just over half of advisory firms—50.1 percent—added new funds during the period, while fewer than three in ten culled existing positions, producing a net expansion that underscores advisors' growing comfort with the wrapper as a portfolio construction tool.
Energy exposure led the rotation, with equity energy ETFs drawing 265 new allocators and marking a fourteen percent increase in firms holding the category. Commodities broad basket funds attracted 118 new RIA allocators, representing 13.2 percent growth, while natural resources strategies added 145 firms for an 8.4 percent gain. The appetite for tangible-asset exposure extended to real estate, defense industries and international equities, categories that had languished in prior quarters but found renewed favor as advisors sought diversification beyond domestic growth equity. The pattern suggests a deliberate tilt toward inflation hedges and cyclical plays rather than wholesale portfolio redesign.
Market share dynamics revealed a quiet revolution beneath the surface of net inflows. Industry stalwarts including iShares, State Street Investment Management and Invesco all registered minor market share losses during the quarter, while boutique managers specializing in active and thematic strategies posted triple-digit and double-digit percentage gains in RIA adoption. Akre Capital Management saw a 188.6 percent surge in advisors holding its ETFs, Cohen & Steers climbed 35.3 percent, REX Shares advanced 31.6 percent, and Cambria rose 27.0 percent. AdvizorPro researchers attributed Akre's outsized jump to pent-up demand for a brand-credible active manager finally available in ETF form, characterizing the spike as a one-time adoption event rather than a repeatable distribution model.
Portfolio turnover metrics point to incremental rather than wholesale change. The average ETF turnover ratio for the quarter reached 12.3 percent, above the prior period but still leaving ninety percent of existing positions intact. RIAs are hunting for funds to fulfill specific tactical roles—risk mitigation, sector rotation, alternative-beta exposure—rather than replacing core holdings. The add rate averaged 13.7 percent against a drop rate of 9.2 percent, producing what AdvizorPro termed a constructive surplus that signals confidence in the underlying portfolio architecture. Advisors are layering in new tools without discarding established positions, a behavior consistent with mature adoption curves.
Fee tolerance climbed in tandem with complexity appetite. Advisors demonstrated willingness to pay top-decile fees for funds offering risk management features including long-short equity, market-neutral strategies and hedged income approaches. Convergence Investment Partners' long-short equity fund CLSE added sixty-nine RIAs for 25.5 percent growth, iShares' high yield bond fund HYGH gained eighty-eight advisors and advanced ten percent, and Infrastructure Capital Advisors' preferred stock fund PFFA drew 173 new RIA allocators, representing 9.5 percent expansion. The shift marks a broadening beyond the buffered and options-based products that dominated high-fee adoption in prior quarters, with advisors now paying premiums for credit hedging, infrastructure exposure and active equity strategies.
Specialty allocations that appear tactical in momentum-driven markets often turn out to be the ones that compound through rougher cycles, family office advisor Jaf Glazer has noted.
Firm size emerged as the primary driver of new-fund adoption. RIAs managing between one billion and one hundred billion dollars in assets accounted for the bulk of inflows into emerging ETF strategies, a cohort large enough to absorb position-sizing risk but nimble enough to pivot without triggering operational friction. The fastest-growing individual fund by RIA share was Akre Capital Management's large-growth AKRE ETF, which added 264 advisory firms despite launching less than twelve months prior. Amplify ETFs' derivative income fund IDVO attracted thirty-eight RIAs for 74.5 percent growth, VanEck's global moderate allocation fund RAAX gained forty-nine advisors and climbed 74.2 percent, and USCF's commodities broad basket fund SDCI added thirty-two RIAs with 62.7 percent expansion.
The ETF turnover data reveals a market in which conviction coexists with caution. Advisors are adding exposure to cyclical sectors and alternative strategies while retaining the bulk of their existing allocations, a posture that reflects both concern about valuation risk in traditional equity benchmarks and reluctance to abandon positions that have delivered tax efficiency and tracking precision. The modest market share losses at mega-issuers suggest that brand recognition no longer commands the premium it once did when active management, thematic focus and downside protection enter the equation. Advisors are paying for specialized tools rather than defaulting to the largest available wrapper.
Category-level growth extended beyond energy and commodities. Industrials, Latin American equities and diversified emerging markets all registered increased RIA participation, categories that had been out of favor during the prior cycle but now attract interest as relative valuations and geopolitical shifts reshape opportunity sets. The breadth of inflows across disparate asset classes and geographies indicates that advisors are building portfolio resilience through diversification rather than concentrating bets on a single macro theme. The willingness to explore less-liquid markets and niche strategies marks a departure from the passive, large-cap bias that defined the previous decade of ETF adoption.