On this special episode of the “ETF of the Week” podcast, VettaFi’s Head of Research, Todd Rosenbluth, reviewed some of his biggest takeaways for the ETF industry in 2025 with Chuck Jaffe of Money Life. 

Chuck Jaffe: One fund, on point for today. The expert to talk about it. Welcome to the ETF of the Week!

Yes, this is the ETF of the Week, where we examine trending, newsworthy, unique, and intriguing exchange-traded funds with the help of Todd Rosenbluth, the head of research at VettaFi. And we always encourage you to go to VettaFi.com to use their tools and research to make yourself a savvier and smarter investor in exchange-traded funds. 

But this is not just the usual ETF of the Week, because here, as we get to the holidays and the end of the year, we’re going to take two weeks to kind of review the year in exchange-traded funds.

Again, VettaFi.com, if you want to review your funds and more. But Todd Rosenbluth, head of research there — happy holidays! Great to chat with you again.

Todd Rosenbluth: Happy holidays to you too, Chuck!

Chuck Jaffe: This has been quite a year in exchange-traded funds. Now, next week we’re going to go over some of the picks that you had for this year and how they turned out. But this year, completely explosive growth in ETFs — a lot of things going on. Explain what are going to be your big takeaways in 2025, as somebody who follows the ETF business.

Todd Rosenbluth: Boy, wow, what a record year for ETFs! We are at $1.4 trillion of net inflows and counting. The year’s not even done, and it’s already been the best year ever. It’s the best year in terms of overall flows. It’s also been the best year in terms of new product development. Through November, we’d already crossed the [line of a]thousand new ETFs that had launched, and even more in December.

And as I look this week, even more are coming…as many asset managers try to get in to set a new track record that starts in 2026. It’s been a record for equity ETFs. A record for fixed-income ETFs. Actively managed ETFs continue to punch above their weight; about a third of the overall flows thus far in 2025 have gone to actively managed ETFs.

No doubt about it, this has been the best year for ETFs, which topped last year, which was the best year at the time for ETFs.

Chuck Jaffe: One thing you didn’t even mention in there, that may be what sets us up for the year ahead, is ETF share class exemptive relief. Now, that’s a complicated way of saying we’re starting to see traditional mutual funds be allowed to issue ETF share classes. And we’ve now had something like 30 or 40 fund companies that have permission to do this, correct?

Todd Rosenbluth: That’s correct. So, it just recently happened in 2025 that asset managers have gotten the approval to, in 2026, if they choose to, offer an ETF share class of their existing actively managed mutual fund.

So, for perspective, Vanguard’s been doing this for years. Vanguard has offered an ETF share class for a couple dozen of their index-based mutual funds. They had a patent that expired, and as such, other asset managers could appeal and get the right to be able to do so.

Dimensional Funds is likely to be among the first of those firms to offer an ETF share class of an existing mutual fund. So, it’s quite likely that in 2026, for an ETF of the Week, we end up discussing a fund that has a long track record that has an ETF share class being bolted on. We’ve talked about some funds that have converted from a mutual fund into an ETF, but this is now adding an ETF share class.

So, let me get ahead of where you might ask: Why would somebody want to do this? Why would an asset manager do this? Why would an investor do this? So, an asset manager wants to tap into a different audience base. There’s a growing number of investors and advisors that are only buying ETFs. They’re building portfolios using ETFs. And so, you can offer an ETF share class of an existing fund, keep that track record, and be able to offer the benefits of that.

If you’re an existing mutual fund shareholder, you might want to have an ETF experience — a more tax-efficient product, often a lower-cost product — and you might want to benefit, or you might want to convert your mutual fund share class into an ETF if and when that happens. 

And I go with “if and when that happens” because we don’t have these products yet, and getting the approval to do something is different than doing something. So, I have the approval to run across the street by my parents because I’m old enough to be able to do that. That’s where that analogy is going. It’s up to me whether I want to do that.

Chuck Jaffe: Well, and as we said, there are now dozens of companies that have the approval. It made a lot of sense for everyone to kind of get in on the legal process that’s involved here, et cetera, so that they could do this. 

But it’s hard to believe that the vast majority — and it’s virtually every recognizable name at this point — I mean, you get 40 fund companies, and the people you’re missing are not that big.

Todd Rosenbluth: That’s right. So there’s a lot of firms that have filed and have gotten the approval to do so, but it is an effort to do so. It’s an effort to line up all of the infrastructure. It’s an effort to get approved on platforms. 

If you are an individual investor and you’re working with an advisor, the ETFs are there that they can buy and sell for you because those products are approved on brokerage platforms. That doesn’t happen overnight. It may not happen, period. We might not see the approval of these products on brokerage platforms. So, a lot to wait for and a lot to be excited for in 2026, tied to the overall ETF share class experience.

Chuck Jaffe: And again, that’s aside from the more than a thousand new launches that we’ve had. Now I’m going to ask you, as we talk about a thousand new launches and we say that that’s a good thing. One of the things that I have long said about the mutual fund world is that mutual funds and exchange-traded funds, they are both mutual funds. Different chassis, same vehicle, basically. 

But if the fund world were a meritocracy, somewhere about 50% or 60% of all funds would disappear. So, when you look at the thousand launches this year, while it’s great news for the ETF industry, you know you have to look back five years from now — how many of those thousand do you think are still going to be alive?

Todd Rosenbluth: Yeah. So a lot of the funds come and go. And while we’ve got a thousand-plus funds — I don’t know the exact count, so I don’t want to make up a number — a number of ETFs have closed this year also that came to market in the past. So, this is just natural. Things come up and get put on the shelf; certain things get taken off the shelf. And a lot of what we had this year is in some forms of innovation. For example, we’ve had a number of leveraged single-stock ETFs. We have a number of cryptocurrency ETFs that have come to the marketplace. There’s a lot of products that have come out.

Some of them are sticking. Some of those are likely to have persistency because they’ve gathered assets. We’ve had a number of firms that have entered the ETF marketplace or expanded their presence into the ETF marketplace. The latest was Baron Capital, a long-standing mutual fund company run by Ron Baron. They now are offering ETFs as of last week. That’s exciting. We might talk about one of those products in 2026 in depth as it ages and we get to know those products a little bit more.

Pictet is another firm that came over from Europe and now is offering ETFs. And then we’ve just seen firms like BlackRock and Vanguard and State Street, and we’ve talked about some of their products that are new in 2025. 

So, a fund is going to launch; it doesn’t mean it’s going to succeed. But there’s been a lot of opportunity for new product development, and it’s up to the investor to do their due diligence. We hopefully are going to provide some support for that. The easy button is to look at the fees. The slightly harder button is to go a bit deeper and understand what a fund holds. I’m excited that we get to talk about this on a weekly basis because this has been a record year for ETFs, and we’ve talked about a lot of great stories, you and I.

Chuck Jaffe: Yes, we have, and we are going to talk about more. And again, next week we’re going to come back and talk about some of the best stories we had this year. But one last question on this one, because it has been a great year, but it’s been a year where we saw some unusual things — I mean, international doing better than the U.S. and things along those lines. And so what are going to be the takeaways from a performance standpoint for you from this year?

Todd Rosenbluth: Yeah, so you’re right. International equities have outperformed the U.S., the last I looked. It was maybe doubling it up. So the S&P 500 was up 15–16%, and international equity strategies were up over 30%. These are the developed market products. Growth has outperformed value thus far this year. A lot of talk about those large-cap growth and artificial intelligence-enhanced companies — they’re benefiting from the trends in artificial intelligence. That has helped. 

So, it’s been a great year for the stock market. It’s been an even better year if you targeted the right areas, focusing on growth or focusing on international. We’ll see what 2026 brings. But it’s been another great year to be an ETF investor and somebody following it like you and I.

Chuck Jaffe: Yeah, it sure has been. And it’s been great to chat with you about it all year, Todd. Great stuff. We will be here next week — we’re not taking the holiday weeks off — but have a great holiday, and I look forward to that next conversation already!

Todd Rosenbluth: As do I. Happy holidays!

Chuck Jaffe: The ETF of the Week is a joint production of VettaFi and Money Life with Chuck Jaffe. And yes, I’m Chuck Jaffe. And if you’d like to know more about my hour-long weekday podcast, go to MoneyLifeShow.com or search for it on your favorite podcast app. 

Now, if you’re searching for more information on your favorite ETF, or maybe the next favorite ETF that you’re going to develop, there is no better place to look than VettaFi.com. They’re on X at @Vetta_Fi. Todd Rosenbluth, their head of research, is my guest; he’s on X as well at @ToddRosenbluth. 

The ETF of the Week is here for you every Thursday, except when, this year, the holidays fall on Thursdays. So we’ll be back next Wednesday with our final chat for this year. Make sure you don’t miss any of our conversations by following along on your favorite podcast app. But until we do this one next week — well, happy holidays everybody, and happy investing!

Note: This article was created in part through assistance from AI tools. The content has been thoroughly reviewed and edited by the author. 

For more news, information, and analysis, visit VettaFi | ETF Trends.