ETF Market Sees Surge in Active Management and Thematic Funds Amid Deregulation

ETF Market Sees Surge in Active Management and Thematic Funds Amid Deregulation

The exchange-traded fund (ETF) landscape is experiencing significant transformations, marked by a notable rise in active management strategies and the introduction of thematic funds designed to capitalize on current political and economic shifts.

Active ETFs Gain Momentum

In 2024, the global asset management industry reached $128 trillion, with active ETFs playing an increasingly prominent role. Although active ETFs currently represent only 7% of the global ETF assets, their growth rate surpasses that of passive products. In the United States, active ETFs have amassed over $1 trillion, accounting for more than 80% of new launches in 2025 and capturing 27% of net ETF inflows in 2024. This trend underscores investors’ appetite for professional management combined with the flexibility and cost-effectiveness of traditional ETFs. Notable asset managers like JP Morgan, Pimco, Fidelity, and Amundi are leading this segment with innovative offerings. (cincodias.elpais.com)

Thematic ETFs Target Deregulation Benefits

Reflecting the current political climate, investment firms are launching ETFs aimed at sectors poised to benefit from deregulation. A prime example is the Free Markets ETF (FMKT.P), introduced by Point Bridge Capital, Tactical Rotation Management, and SYKON Asset Management. Trading on the NYSE, this ETF invests in companies expected to gain from President Donald Trump’s deregulation initiatives during his second term. The fund’s portfolio includes diverse assets such as bitcoin, gold, and stocks from mid-sized financial firms to the nuclear energy industry, with top holdings like Uranium Energy Corp, Robinhood Markets, and Old National Bancorp. (reuters.com)

Exotic ETFs Enter the Market

In response to growing investor interest in digital assets and speculative investments, fund companies are rapidly introducing exotic ETFs. These funds track assets ranging from cryptocurrencies like cardano and litecoin to memecoins such as dogecoin and $TRUMP, and even non-fungible tokens (NFTs) like Pudgy Penguins. This trend is driven by enhanced regulatory openness under the current administration, particularly with crypto-friendly leadership at the Securities and Exchange Commission (SEC). While some industry professionals celebrate this financial innovation, others caution about the long-term viability and potential risks for inexperienced investors. (ft.com)

Trump Media Ventures into Bitcoin ETFs

Trump Media & Technology Group (TMTG), the operator of Truth Social, has filed an application with U.S. regulators to launch the “Truth Social Bitcoin ETF.” Managed by Florida-based Yorkville America Digital, the proposed fund aims to hold bitcoin directly and be listed on the NYSE Arca exchange. This move aligns with the administration’s broader push to promote digital assets, including reversing previous crypto regulations and supporting digital currency firms. Despite President Trump’s past skepticism of bitcoin, he and his family now endorse digital assets, hosting events for major holders of the $TRUMP memecoin and planning to build a bitcoin treasury with $2.5 billion in fundraising. (ft.com)

Vanguard Leads in Australian ETF Market

In 2024, Vanguard emerged as Australia’s top-selling ETF provider, surpassing competitors Betashares and BlackRock. Vanguard attracted nearly A$10 billion in net flows, representing approximately 31% of the industry and marking a 112% increase from the previous year’s A$4.5 billion net inflows. The Australian ETF sector experienced substantial growth, accumulating A$30.8 billion in net new money, double the previous year’s A$15 billion. Vanguard’s Australian Shares Index ETF significantly contributed to this success, ending 2024 with A$17.9 billion in assets. (ft.com)

These developments highlight the dynamic nature of the ETF market, as investors and fund managers adapt to evolving economic policies, technological advancements, and shifting investor preferences.