Last year was the best year for active exchange-traded fund launches, but also the worst ever for mergers and liquidations. In 2025, about 1,000 active ETFs launched, and around 150 were shuttered.
Most of the shuttered ETFs had small asset bases. Funds cost money to operate, and those that don’t garner enough assets are susceptible to being liquidated or merged away. Assuming ETFs have about $250,000 of annual fixed costs, the breakeven for funds would be about $33 million (active ETFs have an average management fee of 67 basis points and a net expense ratio of 75 basis points). Of the roughly 150 funds that closed last year, only six had more than $50 million in assets at the start of 2025. Most of the strategies had less than $25 million.
Most of the closed funds (meaning they cease to exist) had only been in existence for about 1.75 years, which shows asset managers give the ETFs…
