How active ETFs are unlocking innovation and opportunity

Key takeaways

• Investors are increasingly choosing to access actively managed strategies through ETFs due to the wrapper’s benefits, including tax efficiency and transparency.
• BlackRock projects that global active ETF assets under management will triple to US$4.2 trillion by 2030, from US$1.4 trillion as of June 2025.¹
• Active ETFs are managed by BlackRock Portfolio Managers who seek superior market returns, exposure to specific sectors, or targeted outcomes.

Introduction to active ETFs

The Exchange-Traded Fund (ETF) industry has dramatically transformed in the past 30 years, progressively growing in both assets under management and in the variety of ETFs available to investors. From just a handful of U.S.-based funds in 1993 to over 15,000 globally currently, ETFs have evolved to provide transparent access to a broad range of asset classes, sectors, and geographies.²

While ETFs primarily began as index-tracking investment vehicles, that's changing. With ETFs becoming a wrapper of choice — expanding from 15% of total fund assets in 2013 to 30% in 2025³ — investors increasingly want the same low-cost, tax-efficient wrapper to pursue differentiated strategies such as alpha-seeking or to gain unique exposures.

The active ETF universe is broad, with three distinct categories: alpha-seeking, outcomes, and exposures. While index ETFs seek to replicate the performance of an underlying index — such as the S&P 500 — active ETFs may seek to outperform a specific index or achieve a specific outcome, such as generating income.

Both active and index ETFs are professionally managed. But portfolio managers of active ETFs can incorporate proprietary research and react in real-time to evolving market conditions.

We believe the asset management industry is at an inflection point, where active ETFs are becoming an increasingly important part of investor toolkits, alongside mutual funds, closed-end funds, separately managed accounts, and index ETFs.

Consider the following:

• Active ETFs accounted for 88% of all U.S.-listed ETF launches through June 2025, and 51% of global ETF launches.⁴
• Active ETFs comprised 29% of global ETF net asset inflows and organic asset growth through June 2025, up from 20% the prior year.⁵
• BlackRock projects that global active ETF assets under management will triple to $4.2 trillion by 2030, from $1.4 trillion as of June 2025.⁶

Benefits of active ETFs

ETFs as a category have many benefits, including tax-efficiency, low cost, transparency and ease of trading. Incorporating active insights within the ETF wrapper unlocks additional benefits:

• Market dispersion can unlock performance: Increased market volatility and uncertainty are leading to greater dispersion, meaning a greater difference in performance across companies, sectors, geographies, and asset classes. The greater the dispersion, the greater the potential opportunity for managers to generate returns above benchmarks, or alpha.⁷
• Risk management: Portfolio managers of active ETFs can incorporate proprietary research and react in real-time to evolving market conditions. This gives managers freedom to respond to market developments as they seek to outperform benchmarks, target certain investment outcomes, or react to a changing market.
• Potential for fewer capital gains: Fewer active ETFs have distributed gains than active mutual funds.⁸ The in-kind creation-redemption process used by many ETFs may help make active ETFs more tax efficient than their active mutual fund peers. More than half of active mutual funds paid capital gains in the last five years, but only 16% of active ETFs did.⁹