NEW YORK (April 8, 2026) – ISS Market Intelligence (ISS MI), part of the ISS STOXX GmbH group of companies and a leading provider of data, analytics, insights, media, and events solutions to the global financial services industry, today announced the publication of State of the Market: New Rules for the Retail Playground, the third and final installment of its long‑term outlook for the U.S. asset management industry. With this release, the full three‑part State of the Market series is now available to U.S.-based subscribers through ISS MI’s MarketSage platform.
The third and final section leverages data from ISS MI’s robust ecosystem, which includes MarketPulse and MarketPro Discovery, to deliver analysis that maps the structural trends reshaping the retail landscape. It examines the forces redefining how active strategies are delivered, how advisors construct portfolios, and how asset managers must position themselves in an increasingly ETF‑driven marketplace. It also outlines the strategic choices ISS MI says asset managers should make now as they look to the industry’s direction over the next half of the decade and beyond.
“State of the Market: New Rules for the Retail Playground, our third and final section of this year’s series, brings the full picture together,” said Christopher Davis, Head of U.S. Research at ISS MI and author of the report. “The headline takeaway for both emerging and established players is simple: advisors are embracing ETFs with conviction, and that demand is reshaping the supply side of product development. Our analysis shows that there is no single formula for success. What matters now is strategic clarity. Managers must decide who they want to be, where they can truly differentiate, and which opportunities they will pursue. In an industry changing at a surprising speed, this is a time for choosing.”
The report opens by focusing on a pivotal industry inflection point: the SEC’s 2025 decision allowing active managers to use ETF share classes. ISS MI sees this ruling as only further accelerating the long‑running shift toward the ETF vehicle.
Further, the report highlights the potential implications for active management, while active’s share of long‑term assets has fallen from 100 percent in 1976 to 46 percent in 2025, as shown in the chart above. Despite this decline, the report emphasizes that renewal is possible for firms willing to adapt to evolving customer needs, modern product structures, and shifting distribution realities.
Key Takeaways from State of the Market: New Rules for the Retail Playground
- The popularity of ETFs continues to rise, as the vehicle has become an increasingly preferred option among advisors and their clients. Many advisors today, especially RIAs, favor ETFs for cost efficiency, tax advantages, and alignment with model‑driven portfolio construction.
- Product development is diverging sharply. Mutual fund launches hit a record low in 2025 while mutual fund liquidations hit a record high. On the other hand, active ETF launches surpassed 900 new products, setting another record.
- Active ETFs now function as a diverse ecosystem. Alpha‑seeking, outcome‑oriented, and theme- or exposure‑based strategies each follow distinct market dynamics. Alpha-oriented remains dominant, though outcome‑oriented strategies such as buffer and option‑income funds continue to gain share.
- There is no single path to active ETF success. ISS MI’s analysis of the top ten active ETF providers shows that scale is achieved through very different combinations of product architecture and distribution strategy.
- Demand for customization is rising. Advisors and clients are increasingly turning to SMAs, (e.g., direct indexing, private markets, and semi‑liquid structures such as interval funds for tax benefits, personalization, and differentiated access.
“The launch of State of the Market: New Rules for the Retail Playground marks an important new strategic opportunity for our clients and for the industry,” said Kevin Spraggs, Head of U.S. Research Development at ISS MI. “Whether you are an emerging manager looking to enter the ETF arena or an established firm reassessing your long‑term product architecture, this report provides the data and insight needed to make informed strategic decisions. With all three sections now available, asset managers have a clear view of the forces that will define growth and competitive positioning through 2030 and beyond.”
ISS MI’s State of the Market series is produced by its research team and draws on the firm’s full suite of proprietary data, including fund flows, product development intelligence, advisor surveys, 13F holdings analytics, and more. For more than three decades, ISS MI’s global wealth experts have delivered thorough, unbiased, and actionable business intelligence. To learn more, please visit https://marketsage.issmarketintelligence.com/.
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About ISS Market Intelligence
ISS Market Intelligence (MI) is a leading provider of data, insights, and market engagement solutions to the global financial services industry. ISS MI empowers asset and wealth management firms, insurance companies, distributors, service providers, and technology firms to assess their target markets, identify and analyze the best opportunities within those markets, and execute on comprehensive go-to-market initiatives to grow their business. Clients benefit from our increasingly connected global platform that leverages a combination of proprietary data, powerful analytics, timely and relevant insights, in-depth research, as well as an extensive suite of industry-leading media brands that deliver unmatched market connectivity through news and editorial content, events, training, ratings, and awards.
About ISS STOXX
ISS STOXX provides actionable insights through its comprehensive product offerings, proven expertise, and high-quality data that capital market participants around the world can use to inform their decision-making. Across indices, investment stewardship, corporate governance, sustainability, and fund intelligence, institutional investors and companies rely on us to help them manage investments, strengthen their governance practices, and bring new products to market. ISS STOXX, which is owned by Deutsche Börse Group, employs approximately 4,000 professionals operating across 34 locations in 20 countries. ISS STOXX’s clients include many of the world’s leading institutional investors and corporate issuers who turn to ISS STOXX for its objective and varied offerings.
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