Active ETFs Are Winning Advisers. Mutual Funds Could Lose Out.
Active ETFs are moving from novel to normal. Among ETF users surveyed by MSCI, 87% currently invest in active ETFs and 71% expect to increase their use over the next two years. Passive ETFs remain central to portfolios, with 62% of respondents also planning to increase their use.
The findings come from MSCI’s ETF Intelligence Report 2026, based on a survey of 450 advisers and investment decision-makers at financial firms in the U.S. and Europe. They show an ETF market with considerable scope for further growth, with active products becoming a more established part of the mix.
Further growth raises the stakes for managers seeking to capture those assets. The survey offers some clues about what could determine where those allocations land and where advisers see the most value in the ETF structure.
Mutual funds face more competition
The survey suggests that some future active ETF allocations could come from existing mutual fund or UCITS holdings:
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41% expect to decrease their use of mutual funds or UCITS over the next two years. Among U.S. respondents, that figure rises to 62%.
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58% say an allocation to an active ETF from an existing manager would most likely come from a mutual fund or UCITS holding, rising to 67% among U.S. respondents.
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50% would be likely to move to an active ETF version of a mutual fund or UCITS strategy they already hold if offered by the asset manager.
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Among advisers who currently hold an asset manager’s mutual fund or UCITS, 85% would consider switching to an ETF share class of the same strategy from that manager.
Differentiation commands a premium
As the market evolves, the findings suggest that advisers are looking beyond what is available today. Thematic and megatrend ETFs draw were among the most frequently desired area for new product offerings, selected by 47% of respondents. International equities are another area where advisers expect to increase allocations.
Forty-five percent expect to increase equity allocations outside their home markets over the next two years, compared with just 4% who expect to reduce them. Preferences differ by region, with U.S. respondents leaning more toward developed markets and European respondents more toward emerging markets.
Their willingness to pay also varies considerably by exposure. Only 12% of respondents would pay a higher fee for core beta, compared with 58% for an exposure that is difficult to access.
Access still has to be efficient. Liquidity and the ability to trade efficiently rank among the top priorities for 68% of respondents. What an ETF costs to trade can matter alongside what it costs to own.
When products offer similar exposures, other distinctions come into play. Eighty percent of respondents say the index provider influences their choice between comparable ETFs at least sometimes. They matter for active products too, with 67% rating the referenced index extremely or very important when evaluating an active ETF.
Advisers may be looking for new exposures, but access, cost, liquidity and the way that exposure is constructed could all influence which ETF gets the allocation.
Private markets test the limit
Advisers are already active in private markets — 87% invest in private or less liquid assets — but they are far less convinced about putting those assets inside an ETF. Nearly half are open to accessing private or less liquid assets through an ETF, yet only 16% consider private markets a good fit for the ETF structure, the lowest of any asset class tested in the survey.
Liquidity mismatch is the leading concern, cited by 62%, ahead of valuation transparency (50%) and lack of a track record (44%). Respondents are not ruling out private-market ETFs, but they want evidence that the benefits of the wrapper can work with the characteristics of the underlying assets.
The next phase of ETF growth may therefore be less about adding products than about getting the fit right. Active ETFs have momentum, mutual fund assets may provide a source of growth and advisers appear willing to pay for differentiation. But cost, liquidity and structure still shape where those allocations land.
Explore the MSCI ETF Intelligence Report 2026 for more on how advisers are changing their ETF allocations, what they value when selecting products and how preferences differ across the U.S. and Europe. Download the report.