Reviewed by Gotrade Internal Analyst
Gotrade News - The global ETF market just smashed historical records with the launch of nearly 1,000 active investment products throughout 2025. This massive shift signals that asset managers are getting aggressive, offering strategies that aim to beat—not just meet—the market benchmarks.
Why should you care right now? It shows exactly where the "smart money" is heading in a volatile economy. This momentum suggests institutional investors are hunting for specific alpha rather than just riding the passive wave, and it might be time to look at how your portfolio is positioned.
Key Takeaways
-
A record-breaking ~1,000 active ETFs launched in 2025, crushing previous year's stats.
-
Inflows hit $475 billion, heavily dominated by industry titans like JPMorgan and iShares.
-
146 active funds folded, proving that short-term experimental plays often don't cut it.
Active management has officially become the main growth engine in the ETF space. According to data from Morningstar, issuers brought nearly 1,000 active ETFs to market last year, shattering the prior record of 584 set in 2024.
However, this aggressive surge came with a reality check: 146 active ETFs had to shut down after failing to gain traction. Despite the shorter lifespan of these products compared to passive funds, asset managers are doubling down, betting that the appetite for active strategies will continue to outweigh the risk of failure.
The Giants Eat First
Investor interest is undeniable, with active ETFs pulling in roughly $475 billion in inflows in 2025. But here's the kicker: about half of that massive pile of cash went to just six firms, including JPMorgan, Capital Group, Dimensional, iShares, American Century, and Fidelity.
Stephen Welch, a senior analyst at Morningstar, noted that for many traditional asset managers, this is the new vehicle of choice. The heavy inflows indicate that financial advisors are getting comfortable putting their clients into these active strategies, moving away from a "passive-only" mindset.
Survival of the Fittest
Not every strategy survived the hype. The "spaghetti on the wall" approach—where issuers launch niche products just to see what sticks—resulted in casualties. Some funds, like the 2x Daily Software Platform ETF (SOFL), folded just months after launching.
Welch believes this "burn rate" for speculative products will likely slow down. Launching experimental funds to chase day traders costs money, and without sticking power, the traditional heavyweights are likely to pull back on the wildest ideas while focusing on what actually works for long-term growth.
Ready to Build Your US Portfolio?
The rise of active ETFs proves that the market is evolving, offering more ways to diversify than ever before. You can start building your positions with access to over 600 top ETFs and Options in the US market through Gotrade.
That’s the market update worth watching today. Follow Gotrade News for timely coverage on US stocks, ETFs, and macro moves that shape market direction. For a structured starter guide, visit the Gotrade Blog to learn the basics and build your plan.
If you want to act on this news, track price moves and review your portfolio in the Gotrade app. You can start investing in US stocks and ETFs with $1, then align your next steps with your goals and risk profile. Download and open the Gotrade app now!
Reference:
-
The Daily Upside, Nearly 1,000 Active ETFs Launched Last Year. Only About 150 Folded. Accessed on February 3, 2026
-
Featured Image: Shutterstock
