There’s a commonality among nearly all the top-performing ETFs so far this year: oil.

The top 10 exchange-traded funds by year-to-date returns are all up more than 50%, with the Breakwave Tanker Shipping ETF (BWET) leading the pack at about 450%, per data from Morningstar Direct. That ETF in particular, which invests in crude oil tanker freight futures rates rather than oil itself, has also returned roughly 850% over 12 months. While money has been flowing into oil-related ETFs, investors should be mindful of the volatility and the evolving situation globally.

“This is one part chasing momentum, one part a realization that many investors have had no exposure to energy and commodities,” said Todd Sohn, chief ETF strategist for Strategas. “You haven’t necessarily needed them in the initial stages of AI, but once supply chains become affected, that becomes an important focal point. Energy and materials were a combined 5% of the S&P 500 recently, so now there’s a sugar rush to up that exposure via sector and commodity funds.”

Strait Talk

The Iran war and the effective closure of the Strait of Hormuz have sent oil prices skyward, prompting high engagement with traders. The BWET fund, for example, has not only increased its assets about 10-fold since the beginning of the year, to about $25 million, but its daily trading volume has also been anywhere from about 25% to 50% of assets over the past couple weeks. “There has been quite a bit of interest. I’m more impressed with the daily trading volumes than the AUM, especially considering that shipping is not a mainstream industry,” said John Kartsonas, founder of Breakwave Advisors. “The fact that you cannot ship oil, or ship very little oil, from the Middle East to the outside world means that, if you are willing to do it, you have to pay a very high price. Oil, on the other hand, reflects the price of oil globally.”

BWET, along with its companion, the Breakwave Dry Bulk Shipping ETF (BDRY), are volatile, and the recent performance isn’t necessarily surprising, Kartsonas said. “These are cyclical industries,” he said. “In shipping, these are the types of returns you would expect, because it is a very volatile market.” The ETFs come with fees of 3.5%, which reflects daily futures trading in an industry that lacks electronic processes; transactions are made over the phone, he said. “It’s almost like a private market.”

When Oil Tanks: But oil may not be the safest investment choice at the moment, said Julia Khandoshko, CEO of Mind Money, a European broker. After President Trump pushed back a deadline on attacking Iran’s power plants, “prices have already started to decline, so it’s unclear how sure you can be in this commodity,” she said in a statement. “This volatility may be a good thing for those who are looking for short-term benefits, but it may not be suitable for long-term investment because oil is also a mirror of the state of the economy.”

Just like the contestants on a famous reality television competition’s 50th season, exchange-traded funds are duking it out to become a Survivor.

Nearly 1,000 active ETFs entered the market last year, and Brown Brothers Harriman reported this month that 94% of the investors it recently polled said they believe the active ETF market will hit $10 trillion in assets within 10 years, which is an expected annual growth rate of 20%. But many aren’t hitting the $100 million in assets under management that’s considered an indicator of a fund’s success. In fact, only 11% of active ETFs launched in the previous three years raised more than $100 million in the first year, according to a June report by Broadridge Financial Solutions.

Perhaps it’s time to rethink that asset-based survival rate, which Daniel Sotiroff, a senior manager research analyst for Morningstar, said has decreased over time. It may just mean fewer issuers will end up getting kicked off the island. “The cost of launching an ETF and managing an ETF has come down a lot,” he said. “Technology and innovation have crept into the system now.”

The Tribe Has Spoken

More funds than ever are coming to market to offer investors access to thematic investing, defined outcome strategies, active fixed income and more. And while many factors play into a fund’s likelihood of survival — such as whether it’s from a large asset manager that can let it sit on the market for longer thanks to a lineup of other successful funds — fees and performance are still two of the most important:

• “We’re in a day and age where people understand the benefits of being lower cost,” Sotiroff said. A lot of the newer ETFs are specialized with risk-reward profiles that may not pay off, such as leveraged funds. Because they’re doing something different, they’re charging higher fees but “you’ve really got to be giving people something very different that justifies those higher fees,” Sotiroff added.
• If a fund hasn’t performed well, it’s facing a double-edged sword: It’s not growing and it’s not attracting new investors.

As inflation has increased the minimum asset-based threshold for survival of late, cost savings due to technological advances are a powerful force pushing that threshold down, Sotiroff said. Fund managers can outsource much of the legal and operations work, and passive ETFs can especially benefit. While hesitant to share an exact threshold, Sotiroff said the survival rate is likely closer to $50 million than $100 million.

Outwit, Outplay, Outlast. We’ve likely seen most of the cost savings of those technological innovations baked into the market by now, so if the survival threshold does continue to decrease, it will probably do so incrementally. But large language models and automation pose a question mark due to their potential for making it even easier to run a fund. “It’s hard to say where the bottom is,” Sotiroff said.

We just got a letter. Wonder who it’s from … No, wait, there are two letters, and they’re from our friends Larry Fink and David Solomon.

Top asset managers Goldman Sachs and BlackRock published their annual reports to shareholders recently, featuring missives from their CEOs, and there’s good news. Goldman’s asset and wealth management unit has been on a tear that the investment bank expects to continue, thanks to new partnerships and acquisitions that focus heavily on their alternative offerings. Management fees and fees from alternatives increased more than 8% year over year to $2.37 billion in 2025. Alternatives alone saw record inflows of $115 billion last year. Looking ahead, Goldman believes it can bring between $75 and $100 billion of new client assets every year into alternative investments. By 2030, Goldman expects alternative assets under supervision to reach $750 billion.

“We expect further growth from here,” Solomon wrote. “Specifically, we are broadening our client base by increasing the number of advisors and content specialists globally.” Over the next three to five years, the firm is targeting a return of 17% to 19% for its asset and wealth management division.

A Game of Strategy

Goldman’s asset and wealth unit was bolstered in 2025 by a handful of strategic partnerships and acquisitions:

• Last September, Goldman partnered with T. Rowe Price to offer mass affluent and high-net-worth clients wealth and retirement products that have access to private markets.
• In December, the investment bank also announced that it will purchase Innovator Capital Management. Once the deal closes, Goldman is expected to be the second-largest asset manager of active ETFs.
• And at the start of this year, Goldman closed on its acquisition of Industry Ventures, a venture capital platform, which will bolster the investment bank’s alternative offerings.

“While the bar for M&A remains very high, we will continue to look for ways to accelerate growth in AWM,” the Goldman report said.

You’ve Got More Mail. In a separate letter to shareholders this week, BlackRock CEO Larry Fink highlighted his firm’s goals for alternatives.

“We’re seeing excellent fundraising activity,” he said. “We have an ambitious 2026 fundraising plan diversified across infrastructure equity and debt, private financing solutions and multi-alternatives as we progress toward our goal of $400 billion in private markets gross fundraising by 2030.”