US RIAs are using more ETFs, but the bar for new funds is getting higher
Q2 data show advisers adding ETFs at a faster pace even as new launches face hurdles to win shelf space.
The AdvizorPro Q2 2026 RIA ETF Trends Report is out and it underscores the reality that the wrapper has made portfolio construction as sophisticated as ever.
First, the hard data. Then, some nuance to illustrate exactly what it means in practice.
RIA ETF usage broadened substantially in Q2: the average number of unique ETFs held per RIA firm rose from 88.4 to 92.9. Just over 63 per cent of firms increased their ETF count, while only 18.2 per cent reduced it. Across the 5,398-firm matched cohort, advisers added 66,233 ETF positions and dropped 41,489—a net gain of 24,744.
Without doubt, RIAs are using ETFs more, however fewer ETFs are making the cut. Only 41 ETFs appeared in RIA portfolios for the first time in Q2, down from 140 in Q1. Leveraged equity was the largest category among the newcomers, with inverse products also represented.
“New ETFs take time to gain assets and also attention from the market, especially with as many products as there are today,” said Grant Engelbart, Vice President, Investment Strategist at Carson Wealth. According to Engelbart, new entrants face several hurdles: some firms have asset thresholds before they can buy a fund, many new launches are increasingly esoteric—such as leveraged, inverse and single-stock products—and actively managed ETFs can require more time for sufficient due diligence.
That said, smaller issuers can break through.
EntrepreneurShares led the fastest-growing issuers, more than doubling its RIA presence from 90 firms to 194, up 115.6 per cent. Baron Capital rose 83.3 per cent, ProcureAM 72.4 per cent and Tema 52.9 per cent.
Engelbart cautions against interpreting every jump as straightforward organic adoption. EntrepreneurShares Private-Public Crossover ETF (XOVR) held a substantial SpaceX position around the company’s June IPO, which he says likely distorted the quarter’s growth picture.
He also noted that the iShares International Country Rotation Active ETF (CORO)—which jumped from 197 to 364 RIA holders—was self-seeded through BlackRock’s model-portfolio business.
Baron might be the more instructive example. Its ETF business only launched in 2025, but the asset manager has more than four decades of active management experience. It debuted five active ETFs in December, including two mutual fund conversions, meaning allocaters weren’t being asked to trust an unfamiliar operator.
As Engelbart put it, “While their ETF business is new, they have managed similar or identical strategies in a mutual fund or SMA wrapper for decades. This likely increased trust and confidence amongst allocators to add and explore exposure in their product suite.”
That mix—differentiation alongside credibility—may be vital because RIA ETF portfolios appear quite sticky. The AdvizorPro data show that more than 90 per cent of RIA holdings carried over from Q1 to Q2, while new positions outpaced removals. In other words, issuers might have a better shot at uptake if they do a new job in a portfolio rather than try to displace a fund already doing one.
RIAs appear willing to pay for role specialisation. Among ETFs in the highest fee decile, the strongest Q2 adoption came from strategies that offer hard-to-replicate exposures, such as long-short equity, market-neutral strategies, BDCs, closed-end funds and option-overlay income.
Taken together, the data hardly suggest that size and scale do not matter. All ten of the largest issuers by RIA reach added firms in Q2. Engelbart said that issuer experience and reputation remain “as important as ever” as more new issuers enter the ETF market.
Bottom line: a fund needs to have a compelling reason to exist. And behind the ticker—even if it has a catchy arrangement of letters—there must be enough credibility to persuade RIAs to slot it into their portfolios.