New ETF launches continue to outpace fund closures. In 2021, there were 2,692 ETFs on the market; by the end of 2025, that figure had climbed to nearly 5,000 ETF strategies, according to the latest edition of Cerulli Edge—U.S. Product Development Edition.
According to the report, active ETFs dominated the new product landscape, with 953 strategies launched in 2025, representing 84% of all new ETFs introduced during the year. That total surpassed the 797 ETFs launched in 2021 and was more than triple the 308 active strategies introduced that same year. Looking ahead, 83% of ETF issuers intend to launch at least one active ETF in 2026, while 94% are either currently developing (87%) or planning to develop (7%) transparent active ETF solutions.
“The overall ETF ecosystem remains strong, with product development supported by significant inflows into the ETF structure and broad adoption across asset classes. In fact, 2025 marked the third consecutive year of record-breaking ETF launches. At the same time, the rapid rollout of a wide range of high-demand solutions increases the risk of a wave of fund closures,” said Kevin Lyons, Senior Analyst at Cerulli Associates.
Liquidating Funds That Fail to Gain Traction
According to the study, as providers invest more heavily in product development, they are also becoming quicker to liquidate strategies that fail to gain traction, reallocating resources to launch new offerings and remain competitive.
Most ETF closures have involved smaller products with less than $50 million in assets under management (AUM)—funds that failed to attract interest from advisors and end investors and lacked a clear catalyst for future growth.
Cerulli notes that since 2021, more than 85% of ETF closures have occurred among these smaller products, reaching a peak of 92% in 2025. The firm also points out that the population of small-scale products is driven primarily by defined outcome, leveraged, and option income strategies, which together account for nearly one-third of all small-scale ETFs.
“Although closures may increase as new product development accelerates, this is unlikely to slow the overall growth of the ETF industry,” Lyons said.
Cerulli also found that 94% of ETF issuers expect to close two or fewer transparent active ETFs this year, while all respondents anticipate closing two or fewer market-cap-weighted passive ETFs. By contrast, 87% of ETF issuers plan to launch at least one transparent active ETF, with 39% aiming to introduce six or more, while 30% intend to launch at least one market-cap-weighted passive product.
“These findings demonstrate that product development remains the industry’s primary focus. ETF issuers are concentrating far more on launching new products than on shutting down existing ones,” Lyons concluded.
