Investors are piling into active funds, with asset managers launching more of them, according to new research.

European active ETFs saw one of their best years in 2025, with trading activity and inflow surging. Data compiled by xyt found that trading in active funds nearly doubled (95%) last year compared to 2024, with more than €450m in daily activity. Active ETFs likewise saw major inflows, with funds growing 38% or gaining €23bn in assets under management.

The rise in activity is driven by both growing demand by investors for thematic products as well as a rise in the number of asset managers and funds entering the market. Compared to 2020, there are now three times as many active ETF issuers and eight times as many active ETF products.

Investors are increasingly looking at active ETFs as a way to beat the index, while asset managers are attracted by the higher fees charged by actively managed funds.

But while active funds have seen strong growth passive funds remain the overwhelming majority of the ETF market. Active funds hold about €85bn in AUM while passive funds are valued at €2.8tn.

In absolute terms passive funds continued to see strong growth and larger inflows. Over the course of 2025, €217bn flowed into passive ETFs.

Active ETFs offer investors something passive strategies cannot, alpha-seeking approaches, thematic exposures, and tactical flexibility. This expanded range of choices makes the overall ETF market more attractive and supports continued growth across both segments.

“Active ETFs were strong performers last year, driven by investor demand and new product launches. Continued inflows in ETFs more broadly reinforces the importance of funds in supporting liquidity and pricing in the underlying market,” said Robin Mess, CEO at xyt.

Key data points:

• Net inflows grew Active ETF AUM by 38% YoY
• Average Daily Value Traded nearly doubled from 2024
• Number of Active ETF issuers: 3x the 2020 level

Source: xyt