The “active” in active ETFs simply means there is not an underlying index. This somewhat obvious statement, made last February in my predictions column, was intended to dispel the misconception that active somehow means more risk or more tracking error, which certainly is not the case. In my predictions, I was optimistic that investors would appreciate that nuance and continue to seek active managers to get specific outcomes.
Here is a recap of my 2025 predictions:
- Active ETF assets under management (AUM) will hit $1.5 trillion in the United States this year.
Wow! I nailed this one. As of December 18, active ETF AUM sits at $1.49 trillion.1 With a few more days left in the year, I might hit this one on the head.
- There will more active ETFs than index ETFs in the United States.
Bingo on this one as well. Although I did not expect that out of the 1,011 ETF launches in the United States in 2025, 870 (86%) would be active. Astonishing! The number of active ETFs is now more than 500 ahead of index ETFs—2,682 to 2,174.2
- Active fixed income ETFs will reach 50% of all active net inflows.
I was a little too bullish about the increased adoption of active fixed income ETFs. Currently, year-to-date net inflows into all active ETFs sits at around $460 billion, representing 31% of all inflow activity. Fixed income is almost exactly 33% of those active inflows.3
As I was parsing through all the ETF AUM and flow data for 2025 to find any unexpected or surprising trends, it dawned on me that whatever point I wanted to make could be found somewhere in the data. That is what happens when investors are on pace to add over $1.5 trillion of new money into US-listed ETFs, besting last year’s record by over $300 billion.4 US ETF AUM is now almost $13.5 trillion!5
