ETF Use by RIAs Keeps Climbing

Core Insights - The ETF market is experiencing significant growth, with advisors increasingly using ETFs as a primary method for portfolio construction [2][3] Group 1: ETF Market Growth - The average number of ETFs utilized by Registered Investment Advisors (RIAs) increased from 78 to 88, representing a 14% rise from Q4 2024 to Q4 2025 [2] - Over 70% of RIAs reported adding more ETFs to their portfolios, indicating a trend towards more deliberate and diversified allocations [2] - The turnover rate of ETF holdings among advisors decreased from nearly 50% in 2024 to about one third in 2025, suggesting increased comfort with selected ETFs [2] Group 2: Interest in New ETF Products - A survey by Brown Brothers Harriman revealed that 99% of RIAs and large investors are open to purchasing private assets in ETF wrappers, with 82% willing to buy ETF share classes of mutual funds [3] - More than 60% of surveyed investors plan to increase the number of ETF issuers in their portfolios, and 98% of U.S. investors intend to enhance their ETF usage [3] Group 3: Emerging Trends and Predictions - The VIX index has risen by 67% year-to-date, and experts predict that 2026 will see a rise in defined outcome ETFs, despite potential volatility in the market [4] - Fundstrat reported a 173% increase in RIAs using their Grannyshots ETFs, growing from 78 to 213, and a 134% increase in RIAs using NEOS Funds, from 221 to 518 [5] - Established firms like Virtus, Calamos, BlackRock, Morgan Stanley, and Putnam have significantly expanded their RIA presence [5]