Why high-growth advisors are riding the active ETF wave: Capital Group

Capital Group is seeing high-growth RIAs increasingly harnessing the power of Exchange-Traded Funds, according to Holly Framsted, global head of product at the asset management and recordkeeping giant.

“RIAs are largely moving towards ETFs,” she said, during a media roundtable event in Manhattan. “They were some of the earliest adopters, and it's an area of the market where we see a tremendous amount of growth.”

Increasingly, Framsted added, RIAs are adopting active ETFs.

Certainly, active ETFs are enjoying a boom – data released recently by Cerulli Associates said that the number of active ETFs is skyrocketing. Some 953 active ETF strategies were launched in 2025, it said, accounting for 84% of all new ETFs that year. That total number also exceeds the 797 ETFs launched in 2021 and is more than triple the 308 active strategies introduced that year.

“[RIAs] also tend to use model portfolios, and what we find is that among model portfolios - or rather, among the financial advisors that are the fastest growing, they are increasingly outsourcing to model portfolios as a mechanism for driving growth,” said Framsted.

Research released last year by Capital Group found that active ETFs could serve as a client acquisition magnet for advisors looking to attract Gen X, millennial, and Gen Z clients. Capital Group has also highlighted the tax efficiency offered by ETFs as a way for advisors to drive more effective practice management.

“You can effectively free up your time managing the investments and reallocate that time toward client service and new client acquisition,” said Framsted. “And so the RIA ecosystem is one where you see a lot of high-growth financial advisors who are increasingly using models, which are increasingly adopting ETFs because of the tradability and the tax efficiency.”

Active ETFs continue to be a growth driver within that trend, she added.

In July, State Street said that rolling 12-month flows for U.S.-listed ETFs were at $2 trillion, setting a record for any 12-month period, and also providing a sign that a $2.3 trillion year may be possible. Active ETFs took in 39% of all flows year to date, according to State Street.

Framsted told InvestmentNews that Capital Group is the fastest organically growing active ETF issuer in the marketplace. The company, which launched its first active ETF in February 2022, now has over $150 billion of ETF-based assets under management, she added.

Recently, Capital Group also filed for two new multi-asset ETFs focused on income and capital growth, which it says will help advisors meet clients' income needs.