Active ETFs Gain Traction as Advisers Prioritize Value and Fit

Advisers are set to significantly expand their use of active exchange-traded funds, with 71% indicating plans to increase allocations within the next two years, according to an MSCI survey. A substantial 58% of respondents believe new active ETF allocations would likely replace existing mutual fund holdings. The survey of 450 U.S. and European advisers highlights a maturing ETF landscape where the emphasis is shifting from adoption to the strategic value and structural alignment of these products within investor portfolios.

### Money Play

While the survey indicates a broad trend towards active ETFs, Investors should monitor asset flows into active ETF products and assess how individual fund performance aligns with their strategic objectives and risk tolerance.

## Catalyst Analysis: Growing Adviser Demand for Active ETFs The MSCI survey reveals a strong conviction among advisers regarding the future growth of active ETFs. The vast majority of respondents (87%) already invest in these products, and a significant 71% plan to increase their exposure. This trend is coupled with an anticipated growth in passive ETF usage, with 62% of advisers intending to boost allocations. Notably, 58% of advisers suggest that new active ETF investments would likely displace existing mutual fund or UCITS holdings, indicating a direct competitive impact on traditional fund structures.

## Technical Analysis & Key Risk Watch

## Impact on Funds & Asset Management The findings suggest asset managers should prepare for continued demand for active ETF structures. The survey highlights that advisers are increasingly discerning, prioritizing difficult-to-access strategies (58% willing to pay more) and liquidity (68% rank it a top priority). This indicates a need for product development that addresses specific investor needs while maintaining transparency and efficient trading mechanisms. There is also a noted interest in thematic and megatrend ETFs, with 47% of advisers citing them as drawing the strongest demand.