New research from UMB Fund Services and FUSE Research Network shows active ETF adoption has tripled in five years, with 54% of advisors planning to increase allocations in the next 12 months.
Active exchange-traded funds have gone from a niche product to a structural force reshaping US wealth management, commanding 12% of the $14.9 trillion ETF market as of 2025, up from just 4% in 2021.
According to a new report from UMB Fund Services and FUSE Research Network with data covering the full US ETF market through April 2026, supplemented by surveys of both asset managers and financial advisors, the industry is in the middle of a generational shift away from the open-end mutual fund wrapper and toward the ETF structure.
Looking back to 2022, when total US ETF assets contracted from $7.2 trillion to $6.5 trillion amid a broad market selloff, the active ETF segment actually increased its market share from 4% to 5%. That resilience signaled to the industry that advisor and investor preference for the active ETF wrapper was structural, not cyclical.
By 2024, total ETF assets had surpassed $10 trillion, with active strategies capturing 8% of that pool. Through April 2026, the active share has climbed to approximately 12% of a $14.9 trillion market, according to the analysis, which cites Morningstar data.
The supply side has responded in kind. In 2025 alone, a record 1,011 active ETFs were launched compared to just 20 in 2015, as nearly every major asset manager moved from exploration to full-scale execution. Through April 2026, 322 new active ETFs have already launched with only 33 closures, a 10% rationalization rate that suggests the market continues to absorb new strategies.
Amplify ETFs CEO Christian Magoon recently shared with InvestmentNews why he sees active strategies as one of the defining trends of the next decade of ETF investing.
Who’s winning and why
The UMB/FUSE report identifies the top 10 active ETF firms by assets under management, led by Dimensional Fund Advisors, which holds $279.9 billion across 41 funds. Dimensional’s dominance stems largely from its decision to convert existing mutual funds directly into ETFs, instantly transferring a large, loyal asset base into the new wrapper.
JPMorgan follows with $232.6 billion across 45 funds, with Capital Group ($134.6 billion), American Century ($124.2 billion), and BlackRock ($112.3 billion) rounding out the top five, according to the FUSE/Morningstar data cited in the report.
Two outliers in the rankings are First Trust, with 181 active strategies, and Innovator ETFs, with 174 — firms that have focused on thematic, defined-outcome, or niche active approaches, capturing smaller pools of assets across a wide array of specialized products.
The concentration of capital tells its own story. US Equity ($537 billion) and Taxable Bond ($487 billion) together account for over $1 trillion in active ETF assets, supported by 462 and 427 individual ETFs respectively. For managers seeking large-scale home-office model allocations, a presence in these two categories is, according to the report, “essentially a requirement.”
Advisors are actively swapping out mutual funds
The advisor data in the report may be the most consequential finding for active managers still sitting on the sidelines. More than half of financial advisors surveyed plan to increase their use of active ETFs over the next 12 months, the highest intended-increase rate of any investment vehicle tracked in the survey. Only 3% plan to decrease their active ETF use.
The contrast with active mutual funds is stark: 22% of advisors plan to decrease their use of active mutual funds, compared to just 22% planning to increase them — a net negative sentiment that stands in sharp contrast to the net positive 51-point spread for active ETFs.
Independent RIAs currently use active ETFs (14%) at a rate nearly matching their use of active mutual funds (17%), having largely closed a gap that was much wider just a few years ago.
These advisors are also the heaviest users of passive ETFs (24%) and show a higher-than-average use of passive mutual funds (11%), pointing to a “wrapper-first” mentality in which the vehicle with its intraday liquidity, tax efficiency, and lower cost matters as much as the strategy inside it.
Five ways in and which path works best
For asset managers evaluating their entry strategy, the report lays out five distinct pathways: a direct mutual fund-to-ETF conversion, an ETF clone of an existing mutual fund, an ETF “cousin” that shares the mutual fund’s philosophy without replicating its portfolio, a wholly novel ETF, and an ETF share class added to an existing mutual fund (the so-called Vanguard model).
The data on flows and assets by strategy origin makes a compelling case for leveraging existing intellectual property. ETF “relatives” — the combination of clones and cousins — represent only 11% of all active ETF funds but command 37% of total AUM and 36% of all flows, according to FUSE/Morningstar data. New strategies, by contrast, account for 83% of active ETF products but attract only 47% of AUM and 55% of flows.
“Your existing intellectual property and brand history are your greatest assets,” the report states. “Attempting to launch a completely novel strategy without a link to your existing active pedigree is a more difficult path to achieving rapid scale.”
The distribution problem no one is talking about
Even managers who select the right entry strategy face a distribution challenge that the survey data reveals is widely misunderstood. The most difficult hurdles cited by asset managers are not educational or marketing-based, but structural.
Securing a spot on home-office recommended lists and getting ETF placement in home-office model portfolios ranked as the two most “very challenging” obstacles by a wide margin. Quickly building active ETFs to scale ranked third.
By comparison, advisor education and differentiated marketing ranked at the bottom of the difficulty scale, with no managers rating advisor education “very challenging” and only 6% saying the same about differentiated marketing. The implication: the gatekeeping problem in active ETF distribution sits with home-office buyers, not with end advisors.
The mutual fund era is closing?
The report’s final section documents what may be the clearest signal yet of where the industry is headed. When product executives at asset management firms were asked about their development priorities, 96% identified active ETFs as a major focus — more than any other vehicle by a wide margin. Model-delivery separate accounts and interval/tender-offer funds followed at 52% each.
Meanwhile, 68% of managers report that active mutual funds are “not a focus” of their product development plans, according to the FUSE survey. The vehicle that built the active management industry has, by the industry’s own admission, been deprioritized.
“The active ETF is no longer a potential future; it is the current reality of the US asset management landscape,” the report concludes. “For the modern asset manager, the challenge is to successfully translate their active alpha into the wrapper that the market now demands.”