Advisers Plan Increased Use of Active ETFs for Diverse Portfolios
News related to:MSCI Inc · 2 min read
Active ETFs are set for further growth as financial advisers are increasingly incorporating them into their portfolios, according to a survey by MSCI Inc. of 450 advisers across the U.S. and Europe. The survey, titled "ETF Intelligence Survey 2026," reveals that 71% of advisers plan to increase their use of active ETFs over the next two years, marking a significant shift in the investment landscape.
The rise of active ETFs is not just about diversification; it's also about finding the right fit for specific investment strategies. According to Jana Haines, Global Head of Index at MSCI, "Passive ETFs remain the foundation of most adviser portfolios, but active ETFs are increasingly becoming mainstream. What we are seeing is a shift from whether advisers will use active ETFs to where the structure delivers the most value."
Advisers are also considering broader equity allocations beyond their home markets. Forty-five percent of respondents expect to expand their equity holdings, with a greater focus on emerging markets, which 39% of advisers anticipate. Developed markets, on the other hand, are expected to see a 24% increase in allocations.
The survey highlights that advisers are placing a premium on value and liquidity. Nearly half of the respondents (49%) are open to accessing private or less liquid assets through ETFs, but only 16% believe private markets are a good fit for the structure. The main reasons cited for this mismatch include the liquidity of the ETF not aligning with the underlying assets (62%) and a lack of transparency in valuation (50%).
Liquidity and efficient trading are also top priorities for advisers. Sixty-eight percent of respondents consider these factors when choosing an ETF, indicating that the cost of trading is as important as the cost of ownership.
MSCI's survey also found that a new active ETF allocation from a manager already used by advisers is more likely to displace an existing mutual fund or UCITS holding. Fifty-eight percent of advisers said they would replace an existing mutual fund with an active ETF from the same manager, while 85% of those involved in fund selection are open to an ETF share class of the same strategy.
Haines elaborates, "As the ETF market enters a more mature phase, advisers are asking harder questions about the product's fit. The opportunity lies not just in providing more choice, but in knowing where the structure adds value, where its limits lie, and what it takes to earn a place in the portfolio."
The survey underscores the evolving role of ETFs in modern investment strategies, with advisers looking for more tailored solutions that meet specific needs. As the market continues to grow, active ETFs are expected to play a significant role in shaping the future of investment portfolios.