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Actively managed exchange-traded funds are gaining a larger share of the total ETF market, accounting for 84% of new launches last year, according to new research from Cerulli Associates. Going forward, that trend seems set to accelerate.

Cerulli data shows 1,132 new ETF launches in 2025, up from 752 the year prior. During the same period, only 208 ETFs closed, largely affecting funds with less than $50 million in assets. Net new ETF flows also reached a record last year, at $1.5 trillion, up from roughly $1 trillion in 2024.

Overall, the U.S. ETF universe has grown to $13.4 trillion in assets by year-end 2025, representing a five-year compound annual growth rate of 19.6%, Cerulli found.

Of the new launches coming to market in 2025, 953 ETFs, or 84%, involved active strategies. This year, a large majority of ETF issuers—83%—plan to launch at least one active ETF. Most issuers—94%—are either already developing or plan to develop new transparent active ETF products in the future.

“The overall ETF ecosystem remains strong, with product development backed by tremendous flows to the structure and uptake across categories,” said Kevin Lyons, senior analyst at Cerulli, in a statement. “In fact, 2025 marked the third straight year with a record number of new ETF launches. At the same time, the rapid buildout of a range of in-demand solutions creates the risk of a closure wave.”

Aniket Ullal, senior vice president and head of ETF research and analytics at CFRA Research, also cautioned that an acceleration in launches will likely create an uptick in closures.

“Many issuers are launching products knowing that all of their launches won’t succeed and hoping that a successful few home runs can offset the failures,” he said.

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Last year, ETFs that ended up closing largely involved niche, thematic and leveraged/inverse strategies, Cerulli data shows. These were funds with low AUMs that failed to gain enough advisor and investor interest. A report published earlier this year by AdvizorPro found that while RIAs continued to add to their ETF line-ups in the first quarter of 2026, they were looking for products that would fulfill specific roles within their larger asset portfolios rather than overhauling their entire ETF line-up. In recent months, they had been allocating more money to equity energy ETFs, broad-based commodities ETFs and natural resources ETFs, as well as paying premiums for ETFs with risk management components, AdvizorPro reported.

While many industry insiders recommend advisors use active strategies in today’s highly volatile environment—particularly for more complex assets such as international equities—active funds have a mixed performance history compared to passive strategies. For example, Morningstar’s Active/Passive Barometer for 2025 showed that only 38% of actively managed ETFs and mutual funds outperformed their asset-weighted passive composite. Over a 10-year period, an even smaller share of active funds—21%—beat their passive counterparts. Active funds had the best chance of outperformance when they focused on bond and real estate strategies, and were least successful when they focused on U.S. large caps, Morningstar found.

Ullal added that some of the ETFs counted in the “actively managed” category are buffer ETFs, covered call ETFs and rules-based systematic strategies ETFs rather than funds that involve traditional stock picking, leading to the “active ETF” figures becoming inflated.

U.S. equities continued to dominate ETF asset holdings in the first quarter of 2026, accounting for 61.1% of the market share. International equities were in second place, with 16.2% of the market—up from 14.4% a year ago. Taxable bonds also made up 16.2% of ETF assets. Commodities (2.6%), alternatives (2.5%), and tax-free bonds (1.5%) accounted for a much smaller share of the ETF asset universe.