Best and Worst New ETFs of 2025: Top Picks and Duds

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1. What made some new ETFs successful in 2025?
Successful ETFs focused on clear strategies, strong liquidity design, and experienced active management rather than complex or speculative structures.

2. Why did leveraged and inverse ETFs underperform?
Strong sector rallies and market volatility worked against daily-reset leveraged and inverse strategies, leading to compounding losses over time.

3. Are active ETFs gaining popularity over passive funds?
Active ETFs gained momentum in 2025 as investors sought flexibility, risk management, and access to specialized strategies within a liquid ETF format.

4. What risks do private credit ETFs carry?
Private credit ETFs can face liquidity challenges and pricing gaps during periods of market stress despite offering higher income potential.

5. Why did narrow thematic ETFs struggle?
Limited diversification, higher volatility, and weak long-term performance caused investor interest to fade quickly in highly specialized themes.