Active ETF Flows Hit Record Highs in January

Active ETF strategies registered a record $65 billion of inflows in January 2026. That accounted for nearly 40% of the month’s total ETF flows as investors shifted toward manager-driven approaches, according to State Street Investment Management.

The surge reflects growing adoption in the active ETF space. Both active equity and active fixed income strategies hit individual monthly records. Fixed income alone drew $27 billion and equity attracted $32 billion, according to the State Street data. The flows come as market volatility and shifting economic conditions drive demand for strategies that can adapt beyond passive indexing.

Asset managers now view the active ETF opportunity as critical to their growth plans. Nearly all managers (96%) see the ETF structure as a “large opportunity” for their active strategies. Meanwhile, 81% cite “greater alpha” as a driver of their product offerings, according to research from Cerulli Associates.

Active fixed income strategies accounted for nearly half of all bond ETF flows in January. The $27 billion that flowed into active bond ETFs represented a disproportionate share relative to the $56 billion total that fixed income strategies collected for the month, according to State Street.

The momentum has been building. Active ETFs held $1.1 trillion in assets as of the second quarter of 2025, posting a 56% five-year compound annual growth rate, according to the data. In the first half of 2025 alone, active strategies captured 37% of total industry flows.

Active Managers Build Infrastructure

Asset managers have responded by expanding their active capabilities. About 82% of managers now offer transparent active ETFs. 71% are considering dual-share-class structures that would allow mutual funds to offer an ETF share class, according to Cerulli.

The firm’s research shows that 77% of managers plan to develop brand new strategies for the active ETF wrapper, while 73% intend to replicate existing strategies with modifications for the vehicle.

Nearly three-quarters (74%) of managers report that developing model portfolios and asset allocation strategies is a high or moderate priority, supporting the broader shift toward solutions-based offerings, according to Cerulli. Tax optimization has emerged as another key selling point. 48% of managers cite it as a driver of their product development.

If active ETFs maintain their recent pace, full-year 2026 flows could reach $620 billion, potentially pushing total active ETF assets past the $2 trillion threshold, according to State Street projections based on the past three months of activity.

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