A new analysis of registered investment advisers reveals they're rapidly expanding their exchange-traded fund arsenals instead of paring down their portfolios.
The shift reflects how advisors are approaching market volatility and changing economic conditions, layering in new strategies across multiple themes rather than rotating out of existing positions.
The analysis published Thursday drew from the AdvizorPro RIA database tracking over 4,700 consistently reporting advisers through the third quarter of 2025, examining their 13F filings and ETF holdings. Nearly 59% of RIAs increased the number of ETFs they held during the quarter, while only about 19% reduced their ETF count. The average RIA now holds roughly 73 ETFs, up from about 70 in the prior quarter.
"RIAs are expanding into new ETF types far more than they are abandoning old ones," according to the analysis.
Advisers added new ETFs at a rate more than double the pace at which they eliminated positions (17.54% vs 7.74%), with turnover concentrated among a smaller group of highly active RIAs. Most RIAs took a measured approach to expansion, introducing only a handful of new ETF types while removing almost none.
The expansion reflects a broader diversification strategy. Advisers are no longer betting heavily on a narrow set of exposures. Instead, they're spreading across dozens of specialized categories and themes, from defensive plays to income-focused strategies.
Not too surprisingly, digital assets led the field in terms of percentage growth, with Ethereum-focused ETFs from BlackRock and Fidelity gaining the most new RIA allocations. And compared to Q2 when overseas fixed income and equities gained popularity, RIAs leaned more on tech subsectors and derivative income products. The AdvizorPro analysis also revealed a "full refresh" in Q3, with none of the top-growing ETFs in Q2 making a reappearance last quarter.
When it comes to high-fee ETFs – those within the top decile by expense ratio – RIA allocators were most drawn to income or yield-enhancement features, as well as downside buffers and defensive positioning. And while the second quarter showed a willingness to pay extra for tech, buffered outcomes, and innovation-focused strategies, Q3 showed RIAs going more toward higher-yield equity income, global small and mid-caps, and inflation-sensitive bonds, as well as strategies with modest leverage.
"This signals a more conservative stance among RIAs as macro uncertainty continued," AdvizorPro said in its analysis.
Municipal bond ETFs and flexible trading products led category adoption in Q3, gaining traction as advisers sought tax-efficient income amid uncertainty around interest rates. Precious metals ETFs with silver and gold exposure also continued their run as structural hedges against inflation and geopolitical risk.
There was also real momentum around newer thematic exposures that would have seemed esoteric just years ago. AdvizorPro data showed that beyond crypto, defense and industrial-related ETFs also surged, with advisers positioning around geopolitical tensions and domestic manufacturing trends.
"The broader dispersion of thematics - compared with Q2’s tighter clustering – signals growing appetite for differentiated, niche exposures," according to the analysis.
Wealthspire’s Ground Control is also expanding in London, adding a business manager focused on music and global touring
Fund categories are a useful starting point – but they can hide meaningful differences.
New Lifetime Blend+ suite aims to help 401(k) savers build retirement income beyond traditional public market allocations.
New Lincoln Financial data reveals a critical planning disconnect that advisors are well-placed to address with clients.
Monday’s vote rejected a proposal that aimed to generate over $100B over five years.
Growing wealth, evolving priorities, and untapped opportunities are reshaping how women approach long-term investing.
Knighthead Life entered the market with a competitive MYGA. A strong launch earned advisor confidence and paved the way for FIAs.
