Product development for registered funds was at its most aggressive pace in industry history across 2025. Active ETFs led the charge throughout the year, recording almost 1,000 new launches. Active managers have been eager to find new sources of revenue in such a cost-competitive market and have aggressively followed the money flowing into ETFs. This high new product count has come through launches of new strategies, including those heavily employing derivatives, and active managers ensuring their core strategies are available in the ETF wrapper.
The 969 new active ETFs launched in 2025 shattered the prior year’s record of 602, itself significantly above previous years. Single-stock funds were the largest source of this growth compared to last year. The phenomenon, now easily tracked through ISS MI MarketPulse’s new “Single/Dual-Stock” flag, accounted for 300 new active ETF launches in 2025. Launching large series of related funds continues to be a popular approach for other active ETF strategies, with 99 new defined outcome funds also coming to market last year.
While these funds with more narrow mandates certainly help boost the launch total for ETFs, the number of launches in 2025 points to aggressive product development across equity, fixed income, and alternative approaches. Even when excluding those approaches, new active ETF count totaled 507, surpassing the totals of every year on record outside of 2024. The push for new products is also visible within passive ETFs, if to a less dramatic degree. The 183 index ETFs launched in 2025 were the most the vehicle has seen since 2017.
Pressures will continue to weigh on new launches. Active ETF count has soared while mutual funds, the legacy haven for active management, have seen fewer launches each year. 2025 additionally represented the first year in which active ETF liquidations surpassed those of passive ETFs. Many managers are likely still willing to risk the odds, considering the volume of sales and asset growth. Both active and passive ETFs set sales records for the year, with passive ETFs bringing in nearly $1 trillion. Recent research by ISS MI has examined multiple angles of growing influence of ETFs, including how strongly new products are driving asset growth among active ETFs and how aggressively advisor preferences for ETFs have soared.
It will be difficult for new inceptions in 2026 to match 2025’s record pace, but either way, active ETFs stand to be the driving force in new product development.
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Author: Alan Hess, Vice President, U.S. Fund Research, ISS Market Intelligence
