The latest Global ETF Investor Survey from Brown Brothers Harriman shows continued momentum for the ETF market. Despite uncertainty, investors are not shying away from expanding allocations.
Data from 325 institutional investors, advisors, and wealth managers across the US, Europe, and Greater China shows strong demand for active strategies. Furthermore, there is an overwhelming interest in product innovation and opportunities in the private market.
Trust in ETFs
Nearly all respondents (96%) expect to increase their ETF exposure over the next 12 months. Such a majority is a demonstration of confidence amid geopolitical and monetary policy uncertainty. Investors appear to be shifting toward a more balanced allocation strategy, focusing on income generation and downside protection rather than higher-risk themes.
Active management is a major driver of this trend. About two-thirds of investors put active ahead of passive strategies over the coming year, given market concentration and volatility. This belief could further accelerate the growth of the 1.92 trillion active ETF market.
"A 20% growth rate for the active ETF market seems realistic, but that may even understate potential growth," noted Deborah Fuhr, managing partner at ETFGI. She added that expanding ETF share classes and conversions from mutual funds could significantly boost adoption.
Regional dynamics are also influencing the growth. The US remains the most mature ETF market globally, with the largest and most liquid ETFs, such as State Street SPDR S&P 500 ETF (NYSE:SPY) and Vanguard S&P 500 ETF (NYSE:VOO). Still, the proportion of investors planning significant increases in allocation has declined compared with previous years.
Europe and Greater China, meanwhile, continue to see steady adoption as ETFs expand into new investor channels.
Defensive Positioning
Portfolio positioning shows that investors prioritize dividend and income ETFs, with 33% planning to increase exposure over the next year. Sector- or thematic-equity strategies rank second at 28%, while defined-outcome ETFs follow at 26%.
Defensive positioning is also evident: 57% of respondents said low-volatility or defensive sector ETFs—such as utilities and consumer staples—are their preferred tools for managing volatility.
Despite strong demand, the industry still faces structural barriers. Fuhr argues that financial literacy remains the biggest challenge to ETF adoption.
"The biggest barrier is financial literacy and confidence — both understanding ETFs and knowing how to use them," she said, noting that distribution models and platform limitations also restrict access in some regions.
An Emerging Segment
A new segment attracting strong investor interest is private market ETFs. Nearly all respondents said they would consider investing in private market assets via an ETF wrapper, including private equity (53%) and private credit (50%).
The opportunity is significant. Private markets have grown rapidly and could reach between $20 trillion and $25 trillion in assets by 2030, while the global ETF market has already surpassed $19 trillion in assets. Combining the two could broaden access to historically illiquid asset classes.
However, the structure presents challenges. Packaging traditionally illiquid assets into a highly liquid ETF vehicle raises concerns about liquidity management and pricing. While new structures such as evergreen funds and hybrid approaches are emerging, the survey notes that the industry must address these structural issues before private-market ETFs can scale widely.
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