The Active ETF Boom, Assets Up 600%: Broadridge Report Unpacks the Growth and What Sets Apart Launches that Soar from Those that Stall
MWN-AI** Summary
The active ETF market has experienced explosive growth, with assets increasing over 600% from $81 billion in 2019 to $631 billion in 2024, according to a whitepaper released by Broadridge Financial Solutions. The report highlights the potential for active ETFs to reach $1.2 trillion by 2027. However, it also exposes challenges within the sector, including a significant concentration of assets among the top 10 active asset managers, who command 77% of the market.
Despite the surge in launches—660 active ETFs debuted in 2024—only 11% have successfully raised over $100 million in their first year, which is a critical benchmark for long-term sustainability. The report emphasizes that asset managers aiming to leverage this rapid growth must implement strategic plans focused on distribution, identifying unique investment strategies, and targeted engagement with financial advisors.
Broadridge outlines three key principles for success in launching active ETFs: “go with the flow,” “pick a lane,” and “less is more.” Distribution success mainly derives from RIA channels, necessitating that asset managers tailor their outreach to specific platforms. Picking a lane means focusing on core strengths, whether that be innovative strategies or distribution capabilities. Lastly, the principle of “less is more” advocates for concentrating resources on high-potential advisors who are more likely to convert to active ETF users.
As the demand among retail investors for active ETFs continues to accelerate, the report illustrates both the opportunities and pitfalls the market faces, underscoring the need for well-planned strategies in overcoming inherent challenges in this burgeoning sector.
MWN-AI** Analysis
The active ETF market has experienced unprecedented growth, with assets soaring over 600% from $81 billion in 2019 to $631 billion in 2024, and projections suggest this could reach $1.2 trillion by 2027. According to a recent Broadridge report, the active ETF space now represents a ripe opportunity for investors and asset managers, yet it remains competitive and concentrated, with the top ten firms holding 77% of total assets.
For financial analysts and investors, understanding the dynamics behind the booming active ETF market is crucial. The report highlights that while growth has been robust, not all new launches have performed equally. A striking 89% of active ETFs launched in the past three years did not raise over $100 million within their first year, a key benchmark for success. This indicates that merely entering the market is not enough; strategic execution is imperative.
The report outlines three principles crucial for asset managers looking to launch successful active ETFs:
1. **Go with the Flow:** Robust distribution is paramount. Targeting Registered Investment Advisors (RIAs) can lead to better outcomes, as they dominate the active ETF landscape. Managers should align with appropriate distributors while customizing outreach to navigate entry barriers effectively.
2. **Pick a Lane:** Successful firms tend to leverage unique investment strategies, strong brand identities, and proprietary distribution channels. Focusing on inherent strengths rather than attempting to excel in every area can significantly enhance performance.
3. **Less is More:** An emphasis on targeted engagement can yield higher conversion rates, allowing managers to concentrate their efforts on high-potential advisors who already utilize active ETFs.
As the landscape continues to evolve, asset managers must adopt these strategies to capitalize on the active ETF boom, ensuring they meet the increasing demand from retail investors. For those positioned well within this paradigm, the potential for growth could be substantial.
**MWN-AI Summary and Analysis is based on asking OpenAI to summarize and analyze this news release.
PR Newswire
- Active ETF assets are anticipated to grow to $1 .2TAUM by 2027 from only $81B in 2019
- Top 10 active asset managers control 77% of active ETF assets, shedding light on a concentration challenge
- Only 11% of active ETFs launched in the past three years raised more than $100 million in the first year, a primary indicator for success
NEW YORK , June 12, 2025 /PRNewswire/ -- As active ETF assets have grown over 600% in the past five years to $631 billion in 2024, Broadridge Financial Solutions, Inc. (NYSE: BR), a global Fintech leader, today released a new whitepaper titled " Active ETFs: Achieving Escape Velocity ." The whitepaper examines the increased competition within the space and highlights the key strategic imperatives for asset managers looking to launch and scale active ETFs.
"According to our data, 660 active ETFs were launched in 2024, passing record levels, and there is still a significant runway for growth as active ETFs account for only 6% of total active AUM," said Davis Walmsley , Head of US Solutions, Broadridge Data and Analytics. "Despite the favorable environment, success for active ETFs is not guaranteed as a majority of funds fail to eclipse $100 million within the first year and the top managers hold the bulk of the assets. As usage of active ETFs is expected to accelerate among retail investors, asset managers must have a strategic plan in place to ensure a successful long-term launch strategy, equipping financial advisors with the right products to meet investor demand."
According to the whitepaper, there are three key principles that asset managers can adopt to successfully evaluate and leverage active ETFs in the current environment: go with the flow, pick a lane and embrace the concept that less is more.
Go with the Flow
- Success hinges on robust distribution, particularly within RIA (Registered Investment Advisor) channels, which account for the majority of active ETF assets. Managers must align with the right distributors and tailor outreach to platform-specific dynamics, recognizing that entry barriers are higher in broker-dealer and wirehouse channels.
Pick a Lane
- Leading managers have thrived by leveraging one or more of the following: unique investment strategies (e.g., innovation, income), proprietary distribution channels, and strong brand identity. While hitting on all three is unlikely, identifying and doubling down on one's inherent strengths is essential.
Less is More
- Focused engagement with high-potential advisors who already use active ETFs significantly improves conversion and gross sales. By prioritizing advisor scoring and segmentation, managers can better allocate resources and boost early momentum.
Learn more about these trends shaping the global asset management industry from Broadridge's whitepaper. Click here to access Active ETFs: Achieving Escape Velocity.
Many of the insights in this active ETF report are drawn from Broadridge's data, which enables the most comprehensive view of retail and institutional asset distribution. These insights are based on actual investment data and not simply modeled estimates. Broadridge, a trusted partner to asset managers and distributors worldwide, is the authoritative source for market intelligence to help optimize product, strategy, and distribution decision-making.
About Broadridge
Broadridge Financial Solutions (NYSE: BR) is a global technology leader with the trusted expertise and transformative technology to help clients and the financial services industry operate, innovate, and grow. We power investing, governance, and communications for our clients – driving operational resiliency, elevating business performance, and transforming investor experiences.
Our technology and operations platforms process and generate over 7 billion communications per year and underpin the daily trading of more than $10 trillion of securities globally. A certified Great Place to Work®, Broadridge is part of the S&P 500® Index, employing over 14,000 associates in 21 countries.
For more information about us, please visit www.broadridge.com .
Media Contact:
Caroline Wolf
Prosek Partners
cwolf@prosek.com
SOURCE Broadridge Financial Solutions, Inc.
FAQ**
How is the growth of active ETFs, as reported by Broadridge Financial Solutions Inc. (Common Stock BR), reshaping investment strategies among asset managers, especially with their anticipated assets projected to reach $1.2 trillion by 2027?
What specific challenges and opportunities do asset managers face in the competitive landscape of active ETFs, especially considering that the top 10 managers control 77% of these assets, according to Broadridge Financial Solutions Inc. (Common Stock BR)?
What strategies can asset managers implement to successfully launch active ETFs, especially in light of the finding that only 11% of active ETFs launched recently exceeded $100 million in their first year, based on insights from Broadridge Financial Solutions Inc. (Common Stock BR)?
How can the principles outlined by Broadridge Financial Solutions Inc. (Common Stock BR), such as "go with the flow," "pick a lane," and "less is more," be effectively applied by asset managers to enhance the success rates of their active ETF launches?
**MWN-AI FAQ is based on asking OpenAI questions about Broadridge Financial Solutions Inc. (NYSE: BR).
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