In the third quarter of 2025, advisors didn’t just fine-tune their ETF portfolios, they expanded them.

The average RIA now holds about 72 ETFs, up from 69 last quarter, with the median portfolio growing from 38 to 40 funds, according to the latest RIA ETF Trends Report from AdvizorPro. More than half of RIAs increased the number of strategies in which they invested, while fewer than one in five trimmed their lists. The data show that ETF adoption is accelerating among independent financial advisors, experts said, and underscore the continued acceptance of cryptocurrencies besides bitcoin as core components of a diversified portfolio.

“RIAs are still experimenting with a lot of different types of ETFs,” said Michael Magnan, founder of AdvizorPro and an author of the report. “We’ve seen bitcoin ETFs be one of the top players … But this quarter, we saw Ethereum-based ETFs take the cake, and bitcoin wasn’t even in the top 10.”

One of Everything, Please

Although ETF additions were spread out across more products during the third quarter than in the first half of the year, several categories stood out. There was decent growth among income- and derivative-based ETFs, with options-based issuer NEOS Investments garnering significant RIA traction quarter-over-quarter, but funds tracking cryptocurrencies and commodities took the cake. SLV and GLD were added by 133 and 116 firms, respectively, while Ethereum was incorporated by 199 RIAs. Thematics also led the charge, with defense, industrial and AI products gaining significant adoption.

“We’re at an interesting point where there are a lot of new options that weren’t previously available,” Magnan said, including more complex tax-mitigation and options-based strategies. The report also found that:

• SHLD, a defense technology ETF, was added by 136 firms.
• ETFs tracking precious metals, like silver, platinum and gold, were added by 115 RIAs.

Highly Fees-ible: Even high-fee ETFs saw some daylight. Despite industry-wide fee compression, expensive products — often involving complex hedging techniques or downside buffers — continued to attract new RIA users. The Virtus InfraCap US Preferred Stock ETF (PFFA), for example, which has a whopping expense ratio of 2.48%, had a 16% gain in pickup by RIAs quarter-over-quarter.

“We’re seeing a lot of that early adoption happening,” Magnan said, “and I think that’s going to prove a lot of concepts and ETF categories as being things that should be normal and commonplace across the entire advisor spectrum.”

It’s hard to talk about the stock market without also talking about AI.

By now, investors know well that only a handful of companies have a gigantic footprint in market-cap-weighted indexes and that those stocks’ returns are behind the market’s performance. Heavy exposure to Nvidia (up 38% year to date), Microsoft (22%), Alphabet (45%), Palantir (131%) and other names near the top of the S&P 500 has helped goose returns to 15% this year, and some ETFs that focus on AI and technology have done much better. Of course, the downside to top-heavy portfolios is that a change in the fortunes of a few companies can have major consequences for investors, which has been a selling point for the small number of equal-weighted stock ETFs on the market.

“Only around 17% of the stocks in the S&P 500 have outperformed the index. It is clear that the index has been driven by the top 10 to 15 stocks, and I think the opportunities that are outside of the index represent something that people need to take advantage of,” said Omar Aguilar, CEO and CIO of Schwab Asset Management. “We have been on this journey for two and a half years of encouraging clients to reduce their exposure to the concentrated part of the market,” he told ETF Upside at the company’s Impact conference in Denver this month.

It’s What Sells

The top reason that ETF owners cited for adding to their holdings this year is growth potential for AI, according to a recent survey of 1,000 investors by Charles Schwab. It’s also the top factor prompting them to consider buying more. Per that report:

• Just over half said AI’s potential is a reason to invest more, compared with market volatility (42%), high interest rates (40%), inflation (40%), US trade policy (39%), recession fears (38%) and geopolitical conflicts (31%).
• When choosing actively managed ETFs, 63% said the potential for outperformance was their reason, while 51% said it was to access alternatives and 45% cited protection from losses.

Hate to Burst Your Bubble, Bub: There is indeed a level of concentration in the S&P 500 unlike any other time, with the top 10 companies accounting for 40% of the index’s value, Kevin Dreyer, co-CIO of value at Gabelli, said during a presentation at the Impact conference. The average price-to-earnings ratio on stocks in the index is nearly 23, up from just over 21 a year ago and less than 19 over the past 20 years, he said. Still, that mostly reflects earnings, Gabelli portfolio manager John Belton said. “The fact that Nvidia has been such a good stock is really an earnings story,” he said. “There doesn’t seem to be a valuation bubble here.”

In commentary published late last week, Raymond James CIO Larry Adam said that while it’s tempting for people to compare current valuations to those of the dotcom era, today’s fundamentals are stronger. “Back then, businesses were rewarded simply for having ‘dot.com’ in their name,” he wrote. “Today’s AI leaders are profitable and growing.”

Bitcoin has hit some turbulence lately.

After reaching a record high of roughly $126,000 in early October, the price of Bitcoin has since fallen below $90,000, dropping about 20% in the past month, and rippling through ETFs that track the cryptocurrency. Investors pulled $523 million out of BlackRock’s iShares Bitcoin Trust ETF (IBIT) in just one day last week, the largest single-day outflow in the fund’s history, Bloomberg reported. Separately, Morgan Stanley unloaded $104 million in complex structured notes tied to the ETF.

So what’s going on? The simplest explanation is that investors are trimming exposure to riskier assets, said Bryan Armour, director of ETF and passive strategies research at Morningstar. “Crypto is a speculative asset and investors look to exit once reaching a specific catalyst,” he said. The recent flood of new crypto ETFs may signal an opportune exit point for speculators hoping to cash out after increased mainstream adoption, he added.

Not So Itty-Bitty

Still, the recent volatility doesn’t necessarily mean investors have turned broadly bearish. Even with outflows and a roughly 13% year-to-date decline, IBIT remains enormous at $70 billion in net assets. The fund took in $4.3 billion in October alone, according to Morningstar Direct. Its only month of outflows this year came in February, when it lost about $150 million.

Some major investors are leaning in, however. Harvard University’s endowment recently tripled its allocation to IBIT, making it the largest public holding in its portfolio. JPMorgan Chase disclosed that it held 5.28 million IBIT shares at the end of September, a 64% jump from June and a notable shift for a bank whose CEO, Jamie Dimon, once dismissed Bitcoin as a “pet rock.”

Other Bitcoin ETFs, however, haven’t fared as well:

• The Grayscale Bitcoin Trust ETF (GBTC) shed roughly $540 million last month and has seen outflows every month this year, per Morningstar data.
• The Ark 21Shares Bitcoin ETF (ARKB) lost about $240 million in October.
• The CoinShares Bitcoin ETF (BRRR) saw around $5 million in outflows.

It’s always important to have a plan before a selloff like this happens, as a panic is often the worst time to sell, Armour said. “Know the points at which you would sell to take gains and cut losses ahead of time, so emotions don’t dictate actions,” he said.