Ninety-five percent of global ETF investors plan to increase their allocations in 2025, with active ETFs emerging as the clear winner in an evolving market, according to the newly released 2025 BBH Global ETF Investor Survey.
The global ETF market, which surged 27.7% last year to $14.7 trillion, is experiencing a transformation as investors increasingly favor active management over passive approaches, with 97% planning to boost active ETF exposure in the coming year versus 78% in the previous survey.
This flight toward active strategies comes as investors seek better performance in uncertain markets, according to the survey. Despite active ETFs commanding higher fees (0.73% versus 0.43% for passive), investors appear willing to pay a premium for potential outperformance rather than focusing solely on cost efficiency.
Expense ratios ranked only eighth in importance when selecting ETFs, with strategy focus and liquidity/trading costs topping investor priorities. Inflation emerged as the most significant trend influencing investment strategies in 2025, with European (22%) and American (24%) investors focused on this factor, while Greater China investors (28%) expressed more concern about equity valuations, the report reveals.
The survey identified buffered ETFs and fixed-income products as the most attractive investment categories at 29% each, reflecting investors’ focus on downside protection in volatile markets.
Cryptocurrency ETFs followed closely at 27%, with 71% of investors planning to increase allocations in this category over the next 12 months—interest was highest in Greater China (80%) and the U.S. (76%).
Competition among ETF providers is intensifying as 73% of allocators expect to increase the number of issuers they work with this year, according to the report. To differentiate themselves in this crowded marketplace, issuers should focus on providing insightful market research and analysis, valued by 66% of investors, rather than competing solely on fees.
As investors embrace active ETFs, they’re simultaneously reducing exposures to index-based ETFs (53%), actively managed separately managed accounts (48%) and index mutual funds (48%) to fund their growing active ETF allocations, signaling a shift in how investment portfolios are being constructed.
The study polled 325 ETF investors across the US, Europe and Greater China between Jan. 24th and Feb. 3rd.
