Financial Advisers Ready to Boost Active ETF Holdings

A recent survey from MSCI reveals that 71 percent of financial advisers intend to increase their usage of active exchange traded funds by 2026. This data, gathered from 450 professionals across the United States and Europe, signals a clear trend toward moving capital out of traditional mutual funds.

The shift is largely driven by efficiency. Over half of the advisers surveyed indicated they would replace an existing mutual fund with an active ETF version of the same strategy if one becomes available. Regulatory updates earlier this year have simplified this process, allowing asset managers to run mutual fund and ETF share classes within the same portfolio structure.

While active ETFs are gaining ground, advisers remain cautious about moving private assets into the ETF structure. Concerns regarding liquidity mismatches and valuation transparency keep interest in private market ETFs low. Instead, professionals are prioritizing trading efficiency and clear liquidity when building their client portfolios.

Market watchers should monitor how quickly asset managers convert their existing strategies into ETF formats. As more firms adopt these structures, the competition for adviser shelf space will intensify. This trend marks a shift in how portfolio managers view the value of different investment wrappers in the current market environment.