Actively managed exchange-traded funds surged in 2025, with almost 1,000 launches — a roughly 40% increase from the previous year's record, Morningstar notes in a new report. By contrast, the report cites only 150 new passive ETFs and 95 mutual fund launches last year.
At the same time, a record 146 active ETFs were closed in 2025, comprising 114 liquidations and 32 mergers; most had under $25 million in assets. In contrast, 357 mutual funds shut down and only 86 passive ETFs were shuttered.
Active ETFs attracted about a third of new money invested in all ETFs last year, roughly $475 billion, the report says. Niche strategies led the active ETF launches.
Overall, U.S. markets listed about 2,800 active ETFs, 3,500 passive ETFs and 6,300 mutual funds at year end, Morningstar said.
"Short-term, trading-oriented active launches exploded, with more than 340," Morningstar reported. "Short-term-oriented active ETFs include those that use leverage, try to move in the opposite direction of specific market segments, or offer exposure to niche areas or single stocks,"
GraniteShares, Themes ETF Trust and Defiance topped the list of launches by firm, each introducing more than 50 active ETFs, mostly short-term, trading-oriented strategies. Several large asset managers also continued to launch active ETFs, including State Street, T. Rowe Price and BlackRock, Morningstar said.
"Six firms — J.P. Morgan, Capital Group, Dimensional, iShares, American Century and Fidelity — took in roughly 50% of all 2025 active ETF inflows," Morningstar reported.
BlackRock's iShares U.S. Equity Factor Rotation Active ETF (DYNF) led again, with more than $13 billion in inflows.
The firm expects active ETF closures to continue, "as many active ETFs struggle to gain assets. About half of roughly 2,800 active ETFs had more than $50 million in assets as of the end of 2025, leaving 1,260 strategies with less than $50 million."
The trend in closures should continue to accelerate, as 462 of those 1,260 strategies have existed over 18 months, long enough for asset managers to have given them a chance, Morningstar said.
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