Active ETFs Fuel Record Product Growth as Industry Nears 5,000 Funds
The U.S. exchange-traded fund industry continues to expand at a rapid pace, with active ETFs driving a record wave of product launches even as issuers become more willing to shutter underperforming strategies, according to new research from Cerulli Associates.
The number of ETFs available to investors has nearly doubled in four years, growing from 2,692 products in 2021 to nearly 5,000 by the end of 2025, according to Cerulli’s latest Edge—U.S. Product Development Edition. The growth has been fueled largely by active management, which accounted for most new launches last year.
A total of 953 active ETFs debuted in 2025, representing 84% of all new ETF launches. That figure exceeded the 797 ETFs launched across all categories in 2021 and was more than triple the 308 active strategies introduced that year.
“The overall ETF ecosystem remains strong, with product development backed by tremendous flows to the structure and uptake across categories,” said Kevin Lyons, senior analyst at Cerulli. “In fact, 2025 marked the third straight year with a record number of new ETF launches.”
Looking ahead, 83% of ETF issuers expect to launch at least one active ETF in 2026, while 94% are either currently developing or planning to develop transparent active ETF products.
At the same time, competition is intensifying. Issuers are increasingly closing products that fail to gain traction, with more than 85% of ETF closures since 2021 occurring in funds with less than $50 million in assets under management. The percentage reached 92% in 2025.
Defined outcome, leveraged and option-income strategies account for nearly one-third of all subscale ETFs, making them particularly vulnerable to closure.
“Although closures could increase due to new product development, it is unlikely to hamper the broader ETF industry,” Lyons said.
Cerulli found that 94% of issuers expect to close two or fewer transparent active ETFs this year, suggesting that while competition may eliminate weaker products, innovation and investor demand continue to propel the industry’s growth.
