ETF flows are strong, with active management and high-risk funds attracting big money

From Yahoo Finance: 2025-06-26 08:00:00

U.S. exchange-traded fund flows are expected to reach $1.2 trillion in 2025, despite modest stock and bond performance, according to a Bloomberg Intelligence report. The appetite for ETFs persists, with active management and crypto products driving demand for cheap beta exposure.

ETF flows remain strong this year, with cash going into gold and cash-like ETFs. Active management has entered the market in full force, capturing 40% of net flows despite holding only 10% of assets. Most flows are going to active equity funds, including covered call, CLO, and thematic ETFs.

High-risk active ETFs like YieldMax MSTR Option Income Strategy ETF and Direxion Daily TSLA Bull 2X Shares are attracting significant investments. Over 900 ETFs are expected to launch this year, with nearly 90% being active strategies, surpassing last year’s record.

Some ETF launches this year focus on single-security strategies with leverage or options overlays, with retail trades making up 20.5% of U.S. equity volume in the first quarter. While the average ETF fee is around 59 basis points, single-stock strategies command a premium averaging 91 basis points.

Assets in leveraged long ETFs are nearly back to their record high of $101 billion, indicating a strong risk appetite among investors. Despite market conditions, ETF flows are robust, driven by innovation and sustained demand for various products.



Read more at Yahoo Finance: ETF Flows Set for Record; Big Money Enters High-Risk Funds