Active exchange-traded fund (ETF) assets soared to $1.17 trillion as of Q2 2025, a dramatic rise from just $71 billion in 2018, according to The Cerulli Report—U.S. Exchange-Traded Fund Markets 2025. In the first half of 2025 alone, active ETFs attracted $197 billion in net inflows, putting the segment on pace to surpass the $279 billion in flows recorded for all of 2024. 

The sustained momentum reflects a convergence of factors: an influx of new managers entering the market, legacy mutual fund firms diversifying into the ETF space, and traditional ETF issuers expanding beyond their passively managed core offerings to meet advisor and investor demand for alpha-driven strategies. 

“There is particular emphasis on product development within the transparent active segment,” said Kevin Lyons, Senior Analyst at Cerulli. “Eighty-seven percent of ETF issuers tell Cerulli they are currently developing transparent active ETFs, and half plan to convert at least one mutual fund into a transparent active ETF to capitalize on the structure’s lower costs and greater tax efficiency.” 

Cerulli also highlighted a potential industry milestone: the dual-share-class ETF structure—which, pending regulatory approval, could become a key innovation for delivering active ETF solutions more efficiently and flexibly. 

Still, challenges remain. According to the report, 71% of ETF issuers say it is difficult to secure shelf space for active ETFs on broker/dealer platforms, while 58% believe advisors need more education around the effective use and benefits of active ETFs. 

“Asset managers and ETF issuers recognize that positioning themselves effectively in the market is critical to capturing future growth,” Lyons added. “As the development of active ETFs accelerates, success will hinge on close collaboration with wealth management teams to improve distribution, expand educational resources, and ensure these products reach a wider investor base.”