Active ETFs have emerged as a vital catalyst for new product development in the financial markets during the first quarter of 2025. In this dynamic landscape, an impressive total of 195 new funds were introduced in just the first three months—a figure that more than doubles the 94 new funds recorded in the same period last year, Q1 2024 (as shown in Figure 1). If this momentum continues, active ETFs are poised to exceed last year’s milestone of 575 new fund inceptions.
1. Spotlight on Funds Data
Launches: Mutual Funds vs ETFs
Among the noteworthy developments, the launch of single-stock ETFs and defined outcome funds has garnered considerable attention. These innovations are not just diversifying the market but also establishing active ETFs as the preferred avenue for introducing new traditional equity and fixed-income strategies. Alternatively, active mutual funds appear to be slowing down, with only 25 new launches in Q1 2025—a stark contrast to the pace observed in previous years. This shift indicates a growing preference for the flexibility and responsiveness that active ETFs offer in today’s evolving investment environment.
2. Spotlight on Funds Data
Liquidations & Mergers: Mutual Funds vs. ETFs
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By: Alan Hess, Vice President, ISS Market Intelligence
