The floodgates aren’t closing anytime soon.
Active management has become one of the dominant growth engines in the ETF market, and that was highlighted by a record number of fund launches last year. Issuers brought nearly 1,000 active ETFs to market, shattering the prior record of 584 in 2024, according to Morningstar. The surge came with casualties, however: A record 146 active ETFs shut down. Still, despite shorter lifespans than passive funds, asset managers show no signs of pulling back, betting that investor demand and advisor adoption of active products will continue to outweigh the risk of failure.
“For many traditional asset managers, this is a new vehicle and they’re seeing inflows,” said Stephen Welch, senior analyst at Morningstar, adding that active ETFs accounted for about one-third of the new money invested in ETFs last year.
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Whether active ETFs beat the market or not — in the long term, many often don’t — it doesn’t diminish their appeal with investors. Active ETFs took in roughly $475 billion in inflows in 2025, and about half of that went to just six firms: JPMorgan, Capital Group, Dimensional, iShares, American Century and Fidelity.
The inflows partially signal further active ETF adoption among advisors, Welch said. “The flows are picking up steam, so I assume advisors are getting more comfortable with the vehicle and are more willing to put clients into them,” he told Advisor Upside. As for launches:
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The most active issuers were GraniteShares, Themes ETF Trust and Defiance, which launched 71, 63, and 59 active ETFs, respectively.
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“Short-term, trading-oriented” funds were the most popular products with more than 340 launches last year. Those include funds that use buffer strategies or offer exposure to niche areas and single stocks.
Spaghetti On the Wall. In some instances, active ETFs folded only a few months after launching, including the 2x Daily Software Platform ETF (SOFL) and the Azoria 500 Meritocracy ETF (SPXM). Welch said that happens when shops throw out as many ideas as possible to see what sticks with day traders, but that isn’t often the strategy deployed by traditional asset managers. “I could see that approach slowing down,” he said. “You know, it does cost money to launch these things.”
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