U.S. exchange-traded fund (ETF) assets have hit $10 trillion for the first time. That is still around half of the assets in traditional open-end mutual funds, but the gap is closing quickly. An increasingly larger part of this growth is coming from active ETFs, which have accounted for roughly one-third of ETF inflows year to date. More so, ETF launches have become increasingly dominated by actively managed products — since 2020, the number of active ETF launches have averaged more than two-thirds of all ETF launches. Some 75 percent of the more than 500 ETF launches in 2024 have been active so far, the most on record in any given calendar year.
NO LONGER PASSIVE INDEXES
The recent surge in active ETF launches comes for a variety of likely reasons. First is the ability to launch active ETFs more easily and create custom creation/redemption baskets due to updated regulations in recent years. Additionally, the asset-gathering success of several large a