The Future of Active ETFs: Analysts Emphasize Value and Liquidity in Decision-Making

Active Exchange Traded Funds (ETFs) are no longer a niche investment product. According to recent research from MSCI Inc., active ETFs have become a significant part of the investment landscape, showing encouraging growth trends. This shift in focus comes as financial advisors start to prioritize value, liquidity, and the appropriate fit of these assets within their portfolios.

Key Findings from the MSCI ETF Intelligence Survey 2026

The MSCI survey, which gathered insights from 450 advisors across the United States and Europe, highlighted that an impressive 87% of respondents are already investing in active ETFs, with 71% planning to increase their usage in the next two years. Notably, there's a reported 58% of respondents who believe that a new allocation into active ETFs could likely replace an existing mutual fund or a UCITS (Undertakings for Collective Investment in Transferable Securities) holding.

The data suggests a transition in investment behavior, where switching to an active ETF version of a current strategy is becoming more common. A significant 85% of those involved in fund selection expressed openness to considering an ETF share class for strategies they already invest in.

The Shift Towards Broader Equity Allocations

Looking ahead, advisors are eager for a broader range of choices across various strategies and exposures. The survey revealed that 47% of the respondents showed the highest demand for thematic and megatrend ETFs. Furthermore, 45% expect to expand their equity allocations beyond their domestic markets within the same timeframe. Among these, 39% anticipate a greater emphasis on emerging markets, in contrast to 24% focusing on developed markets.

An interesting insight was provided regarding the willingness of advisors to invest in more challenging strategies; 58% indicated they would pay a premium for a strategy that is difficult to access, while only 12% would opt to pay higher fees for core beta exposure.

Liquidity and Structural Fit as Top Priorities

When it comes to liquidity, 68% of advisors ranked the ability to trade efficiently as a top priority. This focus on liquidity underscores the necessity for advisors to not only evaluate the ownership costs of ETFs but also consider their transactable costs. This mindset is particularly relevant as the utilization of ETFs expands into different strategies and asset classes.

While a significant percentage of respondents (49%) are open to the idea of accessing private or less liquid assets via an ETF, only 16% deem private markets as a suitable match for this structure. Most advisors (62%) attribute this mismatch to the liquidity of the ETF not aligning with the characteristics of its underlying assets. Other substantial concerns include valuation transparency (50%) and the absence of a proven track record (44%).

Looking Ahead: The Role of Active ETFs

Jana Haines, MSCI's Global Head of Index, commented on these trends, stating, "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." This perspective highlights the transition toward a more mature ETF market, where advisors are keen on assessing how a particular product fits within their strategies.

Conclusion

In conclusion, the active ETF landscape is poised for significant expansion as financial advisors reshape how they assess and incorporate these products into their portfolios. The dual focus on value and liquidity will likely shape future investment strategies, as well as influence how asset managers position their offerings in a competitive marketplace. As more options become available, the emphasis on achieving the right fit within managed portfolios will be essential in guiding investment decisions.

For further insights, visit MSCI's official website where the full MSCI ETF Intelligence Survey 2026 details are available. Understanding the evolving landscape of active ETFs will be crucial for both advisors and investors in the coming years.