RIAs Expanded ETF Holdings in Q2, Pivoting from Commodities to Semis and AI Funds

Registered investment advisors broadened their use of exchange-traded funds in the second quarter, rotating toward technology, semiconductor and artificial intelligence strategies after favoring real assets earlier in the year, according to AdvizorPro.

The average number of ETFs held by firms climbed to 92.9 from 88.4 in the first quarter, the firm said in its RIA ETF Trends Report. The study compared regulatory filings from 5,398 RIAs appearing in both quarterly datasets.

Overall, 63.4% of firms increased their ETF count, while 18.2% reduced it. Advisors added nearly 25,000 net ETF positions, even as portfolio turnover eased to 11.6% from 12.3%.

Technology led the sector rotation, gaining 230 net RIA relationships. The iShares Semiconductor ETF, VanEck Semiconductor ETF, Technology Select Sector SPDR Fund and Vanguard Information Technology ETF each added at least 149 firms. AI-oriented products also gained users as advisors expanded exposure beyond the largest technology companies into chipmakers and memory suppliers.

Commodities-focused ETFs lost 103 RIAs, while digital-asset products shed 86, reversing the first quarter’s move into real assets.

All 10 of the largest issuers tracked added RIA relationships. Charles Schwab gained 85, First Trust added 79, VanEck attracted 70 and Dimensional added 64. That contrasted with the first quarter, when leading providers were flat or lost users.

New-fund adoption slowed sharply. Only 41 ETFs appeared in RIA portfolios for the first time, down from 140 in the prior quarter, and most were leveraged or inverse products.

The exception was Tema’s Space Innovators ETF, which launched in March and was held by 147 RIAs by quarter-end. The actively managed fund provides exposure to public and selected pre-IPO space companies.