The Fab 5: Todd Rosenbluth’s Top ETF Stories of 2025

1. The Future of ETFs: 1 Portfolio, 2 Formats

In a significant structural shift in November, Dimensional Funds became the first asset manager to gain approval to offer an ETF share class of an actively managed mutual fund. This change sets the stage for what VettaFi expects to be a broader trend, with Dimensional and other asset managers potentially offering an ETF or a mutual fund share class of several dozen portfolios in 2026.

In September I spoke with Alexander Morris, CEO of F/M Investments, and Aisha Hunt, a principal at Kelley Hunt, to understand why this development should matter to advisors and their end clients. The article also addressed the potential challenges asset managers might face as they bring these new share classes to market.

2. QQQ Is Ready for a Modern Makeover

In July, a classic ETF, the Invesco QQQ Trust (QQQ B), initiated the approval process to convert from its restrictive Unit Investment Trust (UIT) structure to a more flexible open-end fund. Last week, Invesco received the necessary approval.

Our original and highly popular article detailed the direct benefits this conversion would provide to shareholders:

• A modest reduction in the expense ratio (from 0.20% to 0.18%);
• The ability for the fund to engage in activities like securities lending; and
• The capacity for simple dividend reinvestment.

3. A Focus on Well-Known & Lesser-Known Dividend ETFs

Dividend ETFs continued to be a powerful draw in 2025. It captured $21 billion of net inflows year-to-date through November — more than any other smart beta category. This strong demand signaled that investors were actively seeking resilient income amidst falling bond yields.

In this piece, I compared the sector exposure differences between the two popular dividend ETFs: the Vanguard Dividend Appreciation ETF (VIG A-) and the Schwab US Dividend Equity ETF (SCHD B+). I also covered more specialized funds that offer high-conviction, thematic ways to target income within specific sectors:

• The ProShares S&P Technology Dividend Aristocrats ETF (TDV A-); and
• The Amplify Natural Resources Dividend Income ETF (NDIV ).

4. Many ETFs in the Toolbox Can Provide Diversification

In early April, when large-cap equity ETFs like QQQ sold off sharply due to tariff concerns, readers sought out ways to diversify to other investment styles. This popular article discussed traditional diversification options, including fixed income and commodity ETFs, such as the Vanguard Total Bond Market ETF (BND A-) and the SPDR Gold MiniShares ETF GLDM).; and

• The Calamos Laddered S&P 500 Structured Alt Protection ETF (CPSL ).

5. 5 Avantis ETFs Gaining Traction in 2025

The tremendous growth in active ETFs was one of the major stories of the year, with this category gathering more than $400 billion in the first eleven months of 2025, representing approximately one-third of total ETF assets. While I celebrated many asset managers in this space, the Avantis lineup, part of the American Century suite of ETFs, stood out for its high demand.

My colleague recently covered how the Avantis suite recently crossed $100 billion in assets, but my earlier article focused on their factor-disciplined active approaches tailored by style. Funds like the Avantis US Small Cap Value ETF (AVUV ) and the Avantis International Emerging Markets ETF (AVEM ) are seen by many advisors as versatile building blocks for asset allocation.

I look forward to another year of ETF growth in 2026. I appreciate the chance to share my take on the most exciting ETF developments to such a sophisticated audience. Thanks for reading.

vettafi.com is owned by VettaFi LLC (“VettaFi”). VettaFi is the index provider for NDIV for which it receives an index licensing fee. However, NDIV is not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of NDIV.

For more news, information, and analysis, visit The Thematic Investing Content Hub.