Flows into active ETF products have coincided with recent product development by issuers, according to research by Cerulli Associates. At the same time, the firm said that ETF issuers and asset managers must meet this ongoing demand growth by adapting their distribution and coverage models.
“As development of more active ETFs progresses, ETF issuers will need to maintain collaboration with wealth management platform and research teams to boost product placement, enhance educational resources, and tackle potential challenges for successful distribution,” the research firm says in an executive summary of “The Cerulli Report—U.S. Exchange-Traded Fund Markets 2025,” released on Thursday.
Seventy-one percent of ETF issuers surveyed in the report said that it is difficult to obtain shelf space on broker-dealer platforms for active ETFs. It highlighted that education is key to distribution and adoption of active ETFs, as 58% of issuers said that advisors need more education on the products, with only 17% disagreeing.
Active ETF assets soared to $1.17 trillion in the second quarter of 2025 from $71 billion in 2018, Cerulli said. In the first half of 2025, active ETFs flows of $197 billion are on pace to break the 2024 annual number of $279 billion.
“Sustained growth in active ETF flows has been buoyed by new managers launching products, more legacy mutual fund managers branching out into the active ETF realm, and longstanding ETF issuers expanding their product lineup beyond its original passively dominated menu of strategies,” Cerulli said.
“There is particular emphasis on product development within the transparent active segment,” according to Kevin Lyons, Senior Analyst at Cerulli. “87% of ETF issuers tell Cerulli they are currently developing transparent active ETFs, and 50% of ETF issuers plan to convert at least one mutual fund into a transparent active ETF, taking advantage of the benefits of an ETF wrapper (lower costs and better tax efficiency).”
According to the firm, an industry initiative for dual-share-class products, if approved, would help firms deliver active ETFs. It said that issuers are working to create solutions to perceived distribution obstacles.
“Asset managers and ETF issuers recognize that an important path to future success is the ability to effectively position themselves in the market to best align with the demand for active ETFs.” – Kevin Lyons
Lyons also pointed out, “Asset managers and ETF issuers recognize that an important path to future success is the ability to effectively position themselves in the market to best align with the demand for active ETFs.”
He added, “As development of active ETFs progresses, ETF issuers will need to maintain collaboration with wealth management teams to boost product placement, enhance educational resources, and tackle potential challenges for successful distribution.”
Jeff Berman, Contributing Editor and Reporter at Wealth Solutions Report, can be reached at jeff.berman@wealthsolutionsreport.com.
