Active ETFs drive market to nearly 5,000 funds by 2025

Cerulli Associates reports that new ETF launches outnumbered closures as the market expanded from 2,692 ETFs in 2021 to nearly 5,000 by the end of 2025. Active funds accounted for the bulk of new products, with 953 active ETF strategies launched in 2025, representing 84% of all introductions that year.

Cerulli said 2025 marked the third consecutive year of record ETF launches. The 953 active strategies in 2025 exceeded the 797 total ETFs launched in 2021 and were more than three times the 308 active strategies introduced in 2021.

The firm attributed the surge in product development to strong investor flows into ETF structures and broader adoption across investment categories. ETF issuers reported plans for continued expansion of active products in 2026: 83% intend to launch at least one active ETF next year, and 94% are either developing (87%) or plan to develop (7%) transparent active ETF solutions.

Survey respondents indicated product-level plans as well: 39% aim to launch six or more transparent active ETFs, and 30% plan to introduce at least one passive cap-weighted product in the coming year.

Cerulli warned that the rapid product buildout raises the chance of more closures. Managers are ending strategies that fail to attract advisers and end investors and reallocating resources toward new offerings. Most closures involve funds with assets under management below $50 million; since 2021, more than 85% of ETF shutdowns have been concentrated in these subscale products, peaking at 92% in 2025.

Defined outcome funds, leveraged ETFs and option-income strategies account for nearly one-third of subscale ETFs and have driven a large share of small-scale closures.

On expectations for bigger product groups, Cerulli found 94% of issuers plan to close two or fewer transparent active ETFs this year, and all respondents expect to close two or fewer passive cap-weighted ETFs.

Kevin Lyons, a senior analyst at Cerulli Associates, noted: “The overall ETF ecosystem remains strong, with product development backed by tremendous flows to the structure and uptake across categories.” He added that while closures could increase amid new product launches, they are unlikely to disrupt the broader industry.