Research shows unprecedented active ETF launches and inflows reshaping advisor allocations.
The active ETF market underwent dramatic change in 2025, with new research showing record product growth and significant shifts in how asset managers are using the structure to deliver investment strategies.
A surge in launches, rising asset flows and increasing product turnover combined to reshape the competitive landscape for exchange-traded funds over the past year.
According to Morningstar Manager Research’s analysis, actively managed ETFs experienced their biggest year ever for new product introductions with almost 1,000 active ETFs launched in 2025, sharply higher than the 584 introduced the year before and far surpassing the pace of new passive ETF and mutual fund offerings.
Investor demand matched the supply with active ETFs attracting roughly $475 billion in net new assets last year, accounting for about one-third of all ETF inflows. That level of asset gathering is notable in a market still dominated by passive strategies, signaling growing acceptance of active ETF structures among advisors and their clients.
Equity-focused strategies and “other” categories, which include short-term trading, tactical, and niche approaches, led the charge in new launches. More than 400 products debuted in these segments. Alternative and short-term strategies were particularly active areas of innovation, with more than 340 launches during the year.
The report shows a record 146 active ETFs were closed or merged in 2025 and while that figure is still lower than mutual fund closure counts, it marks a high point for ETF exits. Passive ETFs saw 86 closures over the same period. Many of the shuttered products were small or specialized offerings that struggled to gain meaningful assets, highlighting the ongoing challenge of standing out in a crowded marketplace. Funds with less than $50 million in assets were especially vulnerable.
Asset flows were also concentrated among a relatively small group of large issuers. Six firms — J.P. Morgan, Capital Group, Dimensional, BlackRock’s iShares, American Century, and Fidelity — captured roughly half of all active ETF inflows. The concentration suggests advisors continue to favor established managers with recognizable brands, broad distribution, and proven operational scale.
Among the most successful products were familiar names such as JPMorgan Nasdaq Equity Premium Income ETF (JEPQ) and JPMorgan Equity Premium Income ETF (JEPI). BlackRock’s iShares U.S. Equity Factor Rotation Active ETF also remained a strong draw following its momentum from the prior year.
Active ETFs are now a central part of the investment product ecosystem, offering expanding choice across traditional and nontraditional strategies. At the same time, the high rate of closures underscores the importance of evaluating liquidity, asset growth, and sponsor commitment before incorporating newer products into client portfolios.