Active exchange-traded funds have evolved from a niche product into a dominant force in U.S. wealth management, now representing 12% of the $14.9 trillion ETF market as of April 2026, according to new research from UMB Fund Services and FUSE Research Network. That marks a significant leap from just 4% in 2021, underscoring a structural shift in how advisors and investors access active strategies.
The report, which draws on Morningstar data and surveys of asset managers and financial advisors, highlights the resilience of active ETFs even during market downturns. In 2022, when total ETF assets contracted from $7.2 trillion to $6.5 trillion amid a broad selloff, active ETFs actually increased their market share from 4% to 5%. This countercyclical strength signaled that the preference for the active ETF wrapper was not a passing trend but a lasting change in advisor behavior.
By 2024, total ETF assets had surpassed $10 trillion, with active strategies capturing 8% of that pool. Through April 2026, the active share has climbed to approximately 12% of a $14.9 trillion market, according to the analysis. The supply side has responded in kind: in 2025 alone, a record 1,011 active ETFs were launched, compared to just 20 in 2015. Through April 2026, 322 new active ETFs have already launched with only 33 closures, a 10% rationalization rate that suggests the market continues to absorb new strategies.
Amplify ETFs CEO Christian Magoon recently shared with InvestmentNews why he sees active strategies as one of the defining trends of the next decade of ETF investing. His comments align with the broader industry momentum, as nearly every major asset manager has moved from exploration to full-scale execution.
Who's winning and why
The UMB/FUSE report identifies the top 10 active ETF firms by assets under management, led by Dimensional Fund Advisors, which holds $279.9 billion across 41 funds. Dimensional's dominance stems largely from its decision to convert existing mutual funds directly into ETFs, instantly transferring a large, loyal asset base into the new wrapper. JPMorgan follows with $232.6 billion across 45 funds, with Capital Group ($134.6 billion), American Century ($124.2 billion), and BlackRock ($112.3 billion) rounding out the top five.
Two outliers in the rankings are First Trust, with 181 active strategies, and Innovator ETFs, with 174 — firms that have focused on thematic, defined-outcome, or niche active approaches, capturing smaller pools of assets across a wide array of specialized products. The concentration of capital tells its own story: US Equity ($537 billion) and Taxable Bond ($487 billion) together account for over $1 trillion in active ETF assets, supported by 462 and 427 individual ETFs respectively. For managers seeking large-scale home-office model allocations, a presence in these two categories is, according to the report, "essentially a requirement."
Advisors are actively swapping out mutual funds
The advisor data in the report may be the most consequential finding for active managers still sitting on the sidelines. More than half of financial advisors surveyed plan to increase their use of active ETFs over the next 12 months, the highest intended-increase rate of any investment vehicle tracked in the survey. Only 3% plan to decrease their active ETF use. The contrast with active mutual funds is stark: 22% of advisors plan to decrease their use of active mutual funds, compared to just 22% planning to increase them — a net negative sentiment that stands in sharp contrast to the net positive 51-point spread for active ETFs.
Independent RIAs currently use active ETFs (14%) at a rate nearly matching their use of active mutual funds (17%), having largely closed a gap that was much wider just a few years ago. These advisors are also the heaviest users of passive ETFs (24%) and show a higher-than-average use of passive mutual funds (11%), pointing to a "wrapper-first" mentality in which the vehicle — with its intraday liquidity, tax efficiency, and lower cost — matters as much as the strategy inside it.
Five ways in and which path works best
For asset managers evaluating their entry strategy, the report lays out five distinct pathways: a direct mutual fund-to-ETF conversion, an ETF clone of an existing mutual fund, an ETF "cousin" that shares the mutual fund's philosophy without replicating its portfolio, a wholly novel ETF, and an ETF share class added to an existing mutual fund (the so-called Vanguard model). The data on flows and assets by strategy origin makes a compelling case for leveraging existing intellectual property. ETF "relatives" — the combination of clones and cousins — represent only 11% of all active ETF funds but command 37% of total AUM and 36% of all flows, according to FUSE/Morningstar data. New strategies, by contrast, account for 83% of active ETF products but attract only 47% of AUM and 55% of flows.
"Your existing intellectual property and brand history are your greatest assets," the report states. "Attempting to launch a completely novel strategy without a link to your existing active pedigree is a more difficult path to achieving rapid scale."
The distribution problem no one is talking about
Even managers who select the right entry strategy face a distribution challenge that the survey data reveals is widely misunderstood. The most difficult hurdles cited by asset managers are not educational or marketing-based, but structural. Securing a spot on home-office recommended lists and getting ETF placement in home-office model portfolios ranked as the two most "very challenging" obstacles by a wide margin. Quickly building active ETFs to scale ranked third. By comparison, advisor education and differentiated marketing ranked at the bottom of the difficulty scale, with no managers rating advisor education "very challenging" and only 6% saying the same about differentiated marketing. The implication: the gatekeeping problem in distribution is the real barrier to entry, not product design or advisor awareness.
As the active ETF market continues to expand, the shift from mutual funds appears irreversible. For advisors, the wrapper choice is now as important as the strategy itself, and for asset managers, the path to scale lies in leveraging existing intellectual property and navigating the home-office distribution maze. The data from UMB/FUSE makes clear that the era of the mutual fund is not over, but its dominance is certainly waning.
