In a Rising Sea of ETFs, What Do Advisors Actually Want?

In case you haven’t noticed, there are a lot of ETFs on the market, and more are launching every day.

In the first half of 2026, issuers rolled out 733 funds, according to Cerulli’s latest ETF trends report. They also closed 145, putting both figures on pace to approach or exceed recent records. Many of the new products are leveraged, inverse or single-stock ETFs, which are intended for day traders rather than financial professionals. With competition for assets intensifying, issuers are increasingly having to decide which products are worth developing, supporting and, ultimately, keeping alive.

A lack of assets is one of the most common reasons for shutting down a fund. Relatedly, insufficient demand from key distribution partners, including financial advisors, is another, according to 69% of issuers. That raises an important question: What exactly do advisors want from their ETFs?

“Advisors are building portfolios, not simply buying a new wrapper,” said Kevin Lyons, associate director of product development at Cerulli.

Tell Me What 

Perhaps unsurprisingly, advisors tend to stick with investment strategies that lean more traditional than novel, per the Cerulli report that polled more than 2,000 advisors along with 25 issuers, representing 90% of total ETF assets:

• Nearly all advisors use US core equity ETFs, while 83% use US core fixed income strategies and 78% use international funds. More specialized strategies are less widely used. About 35% of advisors use derivative-income ETFs and 32% use defined-outcome strategies, though the categories are continuing to catch on.
• There may be a disconnect on where advisors and issuers see opportunity. Some 42% of advisors said there is unmet demand for alternative investment strategies, while 31% said the same about digital assets. By comparison, just 35% and 20% of ETF issuers, respectively, identify unmet demand in those categories.

“This points to interest in expanding the portfolio toolkit, but not to a universal appetite for niche or complex products,” Lyons told Advisor Upside.

Getting More Active. The number of ETF launches in the US has grown significantly each year. In 2020, issuers rolled out more than 300 products, and just last year, they launched more than 1,000 funds, with the majority being actively managed, according to Morningstar.

Looking ahead, Cerulli expects the ETF pipeline to keep flowing, even if issuers are more selective about what they bring to market and support. “Those outcomes can coexist,” Lyons said. “Issuers can pursue aggressive development in selected areas while closing or avoiding products with no clear path to scale.”