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There is room for more ETF adoption among RIA firms, according to the second quarter 2025 “RIA ETF Trends Report” from AdvizorPro.
During the quarter, 5,035 RIAs reported consistent ETF holdings, according to the company. Over half (57.8%) expanded the number of ETFs in their portfolios between the first and the second quarter of 2025, while 22.2% pared down how many ETFs they held. The share of RIAs upping their ETF holdings also rose compared to the increase that happened between the fourth quarter of 2024 and the first quarter of this year, when it was 41.8%.
According to Michael Magnan, founder and CEO of AdvizorPro, these figures show that the RIA industry has not yet reached saturation when it comes to ETF adoption. The number of RIAs expanding ETF holdings in their portfolios “was a pretty big change from what we saw in Q1,” Magnan said. “The net difference was positive in Q1, but it was much less of a net difference than in Q2. There was essentially a surge in the adoption of ETFs. That, I think, points to the fact that ETF use within RIAs is not saturated.”
“We see the other side of the coin—we see a pretty large number of ETFs being launched,” he added. “We see on the wealthtech side all these new firms popping up, and there is a huge number of them now. We are seeing so many ETF launches happening, and you question, ‘Is this saturation? Do we have too many options now?’ But I think the data doesn’t support that.”
However, the report also showed RIAs moving in and out of some ETF allocations quickly. AdvizorPro found that none of the top 10 fastest-growing ETFs among RIAs from the first quarter of 2025 made the list again in the second quarter. In the first quarter, most of the top 10 funds focused on tracking ultrashort bonds and options strategies. In the second quarter, the top 10 ETFs focused on global bonds, foreign equity and foreign currency.
The fastest-growing thematic allocation to ETFs among RIAs was to IBIT, a Bitcoin vehicle, up 19.9%. Other growing sectors included tech funds, ETFs with a global focus, and those tracking commodities.
When it came to RIAs allocating to specific ETFs for the first time, the fastest-growing categories in the second quarter included single currency (up 54.0%), global bond (up 36.5%), Latin American stocks (27.4%) and muni California intermediate (up 19.0%).
AdvizorPro data also shows that RIAs are willing to pay higher management fees for ETFs they believe will deliver attractive returns, as funds tracking leveraged equity, options-based funds and those focused on income continued to gain traction despite their generally higher expense ratios.
ETF issuers that saw the fastest growth in adoption among RIAs between the first and the second quarter of the year included AXS (up 33.3%), Defiance ETFs (up 31.6%), USCF Investments (up 23.2%) and YieldMax ETFs (up 20.4%), among others. Defiance, along with BondBloxx and Neos, was one of only three issuers to make the firm’s top 10 fastest-growing ETFs list during both quarters. Along with Neos, it tends to focus on options and income strategies, while BondBloxx tracks targeted fixed-income investments.
While institutional asset managers already made significant inroads in the RIA space with their ETFs, especially those tracking more traditional indices, “it’s not predominantly those that are growing the most,” noted Magnan. That’s because large institutional issuers might be struggling with shifting their focus from mutual funds to new ETF strategies, he said. “Some of these smaller, but still decently-sized asset managers, are just quickly innovating and providing more options to the market.”
When it came to individual funds, however, the ETF that saw the highest growth in RIA allocators was IDMO, an Invesco vehicle that focuses on foreign large growth (up 73.9%). The list also included IBND, an ETF issued by State Street Global Advisors that focuses on global bonds (up 67.2%) and IGOV, another fund tracking global bonds issued by iShares (up 50%).
AdvizorPro looked at 13F filings, ETF profile data and its proprietary RIA database to develop its findings. Its fastest-growing ETFs among RIAs rankings include funds with at least 50 RIA allocators.
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