Fidelity ETF Leader Ebeling Breaks Down 2025 ETF Market DataETF Trends is now VettaFi. Read More -- VettaFi held its 2026 Winter Symposium last week, focusing on the year that was and the year ahead. The symposium included plenty of juicy data, including from firms like Fidelity Investments. Fidelity's Head of ETF Strategy, Craig Ebeling, joined VettaFi Head of Research Todd Rosenbluth and Director of Research Cinthia Murphy to break down the firm's ETF market data for 2025 and speak to his views on the yea ...

Core Insights - Avantis Investors has launched a new global equities ETF named Avantis Total Equity Markets ETF (AVTM) on the New York Stock Exchange, which includes both U.S. and non-U.S. developed and emerging market equities [1] - The ETF aims to differentiate itself from passive, market-cap weighted index funds by providing better risk characteristics and targeting firms that offer higher-than-expected returns [1] - The fund will charge a net expense ratio of 22 basis points, and it is part of Avantis's suite of 45 strategies offered in both U.S. and international markets [1] Market Context - The launch of AVTM comes at a time when investors are increasingly seeking equities exposure outside the U.S., while still wanting access to U.S. equities [1] - Avantis's Chief Investment Strategist emphasized the importance of fulfilling client needs, which has contributed to the firm's strong growth and adoption in recent years [1] Management Team - The global equities ETF will be managed by a team that includes Chief Investment Officer Eduardo Repetto and senior portfolio managers Mitchell Firestein, Daniel Ong, Ted Randall, along with portfolio manager Matthew Dubin [1]

Core Insights - Options-based ETFs gained significant popularity in 2025, with derivative income ETFs attracting $54 billion, increasing their total asset base to $127 billion [1] - Defined outcome strategies managed assets worth $76 billion, indicating a strong market presence and investor interest in these financial products [1] Group 1 - The rise of options-based ETFs reflects a growing trend in the investment landscape, showcasing investor appetite for derivative income strategies [1] - The substantial inflow of $54 billion into derivative income ETFs highlights the effectiveness of these products in attracting capital [1] - The total asset base of $127 billion for derivative income ETFs signifies a robust growth trajectory within this segment [1] Group 2 - Defined outcome strategies, with $76 billion in assets under management, demonstrate a solid foothold in the market [1] - The performance of defined outcome strategies suggests they are appealing to investors seeking specific risk-return profiles [1]

Core Insights - The active corporate bond ETF KORP has gained a five-star rating from Morningstar, highlighting its strong performance in the market [1] - KORP has seen its assets under management (AUM) triple since 2020, indicating significant growth and popularity among investors [1] - The fund focuses on intermediate-term investment-grade corporate bonds while also allocating some assets to junk bonds, achieving a yield to maturity of 5.8% and a 30-day SEC unsubsidized yield of 4.9% as of December 31 [1] Performance Metrics - KORP has delivered an 8.5% return over the past year, outperforming its ETF Database Category average [1] - The fund charges a fee of 29 basis points for its services, which is competitive in the active ETF space [1] Strategic Advantages - The active management strategy allows KORP to closely analyze issuer fundamentals and sector data, providing an edge over passive bond funds that replicate indexes [1] - Active funds like KORP can adjust their holdings in response to early calls or defaults, enhancing their resilience in uncertain market conditions [1]

Core Viewpoint - The T. Rowe Price Tech ETF (TTEQ) offers a flexible investment vehicle that allows for a broader definition of tech stocks, enabling better access to earnings results across various sectors [1] Group 1: ETF Characteristics - TTEQ charges a fee of 63 basis points and includes key tech names like Alphabet (GOOGL) and Meta (META), which are categorized under communications [1] - The fund is managed by Dom Rizzo, who employs a strategy that blends innovative tech companies with critical tech infrastructure firms [1] - TTEQ has the flexibility to invest in both large-cap tech firms and newly public companies, enhancing its investment scope [1] Group 2: Performance and Strategy - Over the past year, TTEQ has achieved a return of 20.8%, outperforming its ETF Database Category average [1] - The fund's investment strategy is based on fundamental research, stock valuation, and share price growth potential [1] - TTEQ recently completed a private investment in OpenAI, indicating its commitment to innovative tech investments [1] Group 3: Future Outlook - TTEQ is positioned not only for immediate earnings results but also as a long-term investment option for those interested in tech across various sectors [1]

Core Insights - T. Rowe Price Investment Management's active ETF asset base has nearly doubled in the past year, indicating a shift towards funds focused on stock and bond selection rather than passive index tracking [1][4]. Group 1: Market Trends - The ETF market is experiencing a division between "sharp objects," which are risky single-stock and leveraged products, and strategic active funds managed by experienced portfolio managers [2]. - Active ETFs now account for approximately 11% to 12% of total ETF assets, a significant increase from lower levels three to five years ago, with projections suggesting growth to the "higher teens" percentage within five years [4]. Group 2: Fund Performance - The T. Rowe Price Capital Appreciation Equity ETF (TCAF), launched in June 2023, has grown to over $6.3 billion in assets by employing fundamental research to construct a portfolio of around 100 companies [5]. - TCAF focuses on capital allocation quality and long-term potential, contrasting with the volatility associated with leveraged products [5]. Group 3: Investment Strategies - Advisors utilize active ETFs in various ways, with some employing options-based strategies for income, while strategic stock-picking funds like TCAF aim to outperform through security selection rather than leverage [6].

Core Insights - Small-cap ETFs are experiencing renewed investor interest after a period of outflows, indicating potential investment opportunities ahead [1][2] - The shift in investor sentiment is attributed to favorable monetary and fiscal conditions for smaller companies, with historical data showing small-caps outperform large-caps by 6% in the year following Federal Reserve rate cuts [3] - Valuation metrics indicate that small-caps are trading at a 12% discount to their pre-pandemic five-year average and are 36% below large-caps on a relative basis, suggesting a buying opportunity [4] Investment Themes - Active ETFs have seen significant growth, collecting a record $580 billion in 2025, while active mutual funds faced $640 billion in outflows [5] - Over the past decade, active ETFs have gained $1.2 trillion in assets, contrasting with active mutual funds that lost nearly $4 trillion [5] - In 2025, 47% of active fixed income managers outperformed their benchmarks, compared to only 32% of active equity managers, highlighting the stronger performance of fixed income [6] Diversification Trends - The case for diversification has strengthened, as multiple asset classes delivered positive returns in 2025, marking the first time since 2019 that stocks, bonds, and commodities all outperformed cash [7] - A notable 76% of countries in the MSCI ACWI index outperformed the U.S., the highest percentage since 2009, indicating a shift in global investment dynamics [7] - The SPDR Bridgewater All Weather ETF (ALLW) is highlighted as a diversification option, with significant trading volume exceeding $10 million in 12 of the last 13 days [8]

Core Insights - The proliferation of ETFs since the introduction of the ETF rule in 2019 has led to significant growth in active ETFs, which combine the benefits of active management with the flexibility of ETFs [1] - Active ETFs, such as those offered by American Century Investments, have evolved to provide lower costs and diversification while maintaining active management strategies [2] Active ETF Growth - The Avantis U.S. Small Cap Value ETF (AVUV) exemplifies the successful integration of active management and ETF structure, achieving over $5.5 billion in assets under management (AUM) in the past year, bringing total AUM to over $20 billion [3] - The strategy of AVUV has yielded a return of 12.1% over the last three months, showcasing the effectiveness of its systematic investment approach [3] New Product Launches - American Century Investments has launched two new active ETFs, the American Century Small Cap Value Insights ETF (ACSV) and the American Century Small Cap Growth Insights ETF (ACSG), which focus on small-cap firms through fundamental research [4][5] - Both ACSV and ACSG charge a fee of 49 basis points and aim to construct portfolios based on value and growth perspectives, respectively [5] Investment Strategy - The combination of ACSV and ACSG allows for a deep active investing focus while leveraging the tradability of ETFs, enhancing overall portfolio strategies [6] - Active ETFs are designed to cater to various risk tolerances and investment goals, with AVUV, ACSV, and ACSG representing a few examples of the category's growth [6]

Group 1: Industry Consolidation - The industry is expected to see consolidation, highlighted by Goldman Sachs' acquisition of Innovator ETFs, with over 400 unique ETF brands and 4,000 products in the market [1] - Raymond James' acquisition of Clark Capital Management Group indicates a trend, with expectations of three to five meaningful deals in the current year [2] Group 2: Smart Beta ETFs - Predictions suggest inflows for smart beta ETFs will double from $37 billion to $75 billion, with the Invesco S&P 500 Equal Weight ETF (RSP) being the fourth-largest fund by flows this year [3] - The record for smart beta inflows was set at $103 billion in 2022 [3] Group 3: Crypto Index ETFs - Skepticism exists regarding the prediction that crypto index ETFs will triple assets from $1.7 billion to $5 billion, as year-to-date flows have primarily gone to bitcoin and ethereum funds [4] - A survey indicated that 42% of advisors prefer crypto index ETFs over individual tokens [4] Group 4: International Equity and Fixed Income ETFs - Predictions on international equity and fixed income ETFs breaking records are endorsed, with bond ETFs capturing 32% of total flows this year, up from 29% last year [5] - Flows are shifting from short duration to the belly of the curve, approximately six years duration [5] Group 5: Active ETFs - Active ETFs experienced record inflows of $580 billion in 2025, contrasting with active mutual funds that had $640 billion in outflows [6]

Core Insights - Fixed income ETFs had a record-breaking year in 2025, with inflows rising 45% to $437 billion from $300 billion in 2024, driven by macroeconomic uncertainties and falling interest rates [3][2] - Morningstar predicts that fixed income ETFs will continue to gain market share, potentially reaching 33% of the bond fund market by the end of 2026, as they have been gaining an average of 2% market share per year since November 2015 [4][5] - The demand for short-term bond ETFs is expected to increase as they offer competitive yields compared to traditional money market accounts, appealing to investors seeking better returns on cash [6][7] Market Trends - In 2025, nearly 150 new fixed income ETF products were launched, indicating a growing interest in active management within the fixed income space [2] - Broad-based fixed income ETFs, such as the iShares Core U.S. Aggregate Bond ETF (AGG) and the Vanguard Total Bond Market ETF (BND), attracted significant inflows, with $177 billion reported [8] - Active ETFs are gaining traction, with funds like the Eaton Vance Total Return Bond ETF (EVTR), JPMorgan Income ETF (JPIE), and PIMCO Multisector Bond Active ETF (PYLD) being highlighted for their potential to outperform traditional indices [9] Future Outlook - The fixed income ETF market is expected to remain dynamic in 2026, with continued investor interest in both broad-based and actively managed funds [10] - The current low-interest-rate environment from banks is likely to drive more investors towards short-term bond ETFs as a means of earning higher yields [7]