Registered Investment Advisors (RIAs) demonstrated a sustained commitment to Exchange Traded Funds (ETFs) in the first quarter of 2026, as evidenced by a new report from AdvizorPro. The analysis, which scrutinizes 13F filings from over 5,300 RIAs, reveals a consistent pattern of net new ETF additions to advisory portfolios. This trend underscores a maturing ETF market where advisors are increasingly seeking specific exposures and actively managed solutions to refine their investment strategies, rather than undertaking wholesale portfolio overhauls.
The average number of ETFs held per RIA firm climbed to 89.7 during the first quarter of 2026, a notable increase from previous periods. This expansion of ETF holdings signifies a growing reliance on these investment vehicles for portfolio diversification and tactical allocation. AdvizorPro’s findings indicate that a significant majority of RIAs, precisely 50.1%, were actively adding new ETFs to their investment lineups. In contrast, only 28.9% of firms engaged in culling their existing ETF holdings, suggesting a net positive growth in ETF adoption across the advisory landscape. This balanced approach, with a clear bias towards accumulation over liquidation, paints a picture of a confident and expanding ETF market within the RIA segment.
The influx of new capital into ETFs during the first quarter was particularly concentrated in specific asset classes and sectors. Funds with a focus on energy, natural resources, and commodities experienced a substantial surge in investor interest. This aligns with a broader market sentiment that often gravitates towards tangible assets and cyclical sectors during periods of evolving economic conditions. Beyond these core areas, growth was also observed in real estate, defense industries, and international equities, indicating a diversified appetite for global opportunities and strategic sector bets. The robust performance and strategic allocation towards these areas highlight RIAs’ proactive approach to capturing emerging market trends and diversifying risk across different economic drivers.
Shifting Dynamics Among ETF Issuers
While the overall adoption of ETFs by RIAs continued its upward trajectory, the competitive landscape among ETF issuers saw some notable shifts. Several of the largest and most established ETF providers, including iShares, State Street Investment Management, and Invesco, experienced minor erosion in their market share during the first quarter. This suggests a dynamic market where even dominant players are facing increasing competition.
Conversely, issuers specializing in active management and niche or specialty strategies witnessed a significant gain in market share. This trend points towards a growing demand for ETFs that offer more than passive index tracking. RIAs are increasingly looking for solutions that can provide alpha generation, risk mitigation, or access to unique investment themes that may not be adequately represented in traditional broad-market indexes.
Among the prominent beneficiaries of this shift were Akre Capital Management, which saw a remarkable 188.6% increase in the number of RIAs holding its ETFs. Cohen & Steers followed with a 35.3% rise, REX Shares with a 31.6% increase, and Cambria with a 27.0% growth in RIA adoption of their respective ETFs. These figures underscore a broader investor sentiment that values specialized expertise and differentiated investment approaches, often delivered through the accessible ETF wrapper.
Strategic ETF Integration Over Portfolio Overhaul
AdvizorPro researchers highlighted a crucial evolution in how RIAs are integrating ETFs into their investment frameworks. The prevailing strategy appears to be one of targeted integration, where advisors are seeking new ETFs to fulfill specific roles within their existing portfolios, rather than engaging in broad-scale overhauls of their entire fund lineups. This implies a more sophisticated and nuanced approach to portfolio construction, where ETFs are seen as precise tools for tactical adjustments and to fill identified gaps.
While the average ETF turnover ratio for RIAs rose to 12.3% in the first quarter, exceeding the previous quarter’s figures, a significant portion of existing ETF positions were retained. The report indicates that RIAs held onto approximately 90% of their existing ETF holdings. This high retention rate, coupled with the net increase in new ETF additions, suggests that advisors are carefully curating their portfolios, adding value through strategic selection rather than through constant trading.
"The constructive signal is not the [turnover] rate itself but the consistent surplus of adds over drops," the researchers from AdvizorPro noted in their report. This observation is critical, as it indicates that the growth in ETF holdings is driven by deliberate additions rather than speculative trading. The add rate for ETFs averaged a healthy 13.7% in the first quarter, significantly outpacing the drop rate of 9.2%. This consistent surplus of additions over deletions provides a strong indication of sustained confidence and strategic expansion within the RIA ETF market.
Key Growth Sectors and Strategies
Digging deeper into the data, AdvizorPro identified specific strategy categories that experienced significant RIAs inflows. Equity energy ETFs saw a notable 14% increase in RIA allocation, attracting 265 new advisors. The commodities broad basket category experienced a 13.2% rise, with 118 new RIAs adding these funds to their portfolios. The natural resources category also saw robust growth, with an 8.4% increase and 145 new RIAs allocating to these ETFs.
Beyond these prominent sectors, other areas that witnessed growing interest from RIAs include industrials, Latin American stocks, and diversified emerging markets. These selections reflect a forward-looking investment approach, anticipating growth opportunities in both developed and developing economies, as well as in key industrial sectors poised for expansion. The diversification across geographic regions and industrial segments suggests a strategic effort by RIAs to build resilient portfolios capable of navigating varied global economic landscapes.
Spotlight on High-Growth ETFs
While established players saw minor dips, certain ETFs experienced exceptional growth in RIA adoption during the first quarter. The Akre Capital Management large-growth AKRE ETF emerged as a standout performer, adding 264 RIAs and achieving an impressive 188.6% quarter-over-quarter growth. AdvizorPro, however, provided crucial context for this surge, clarifying that "A 188.6% CRD surge in a single quarter for a fund less than a year old reflects pent-up advisor demand for a brand-credible active manager finally available in ETF form. It is a one-time adoption event, not a distribution blueprint." This indicates that the growth was largely driven by the conversion of a well-regarded active management strategy into an ETF format, attracting advisors who were already familiar with and trusted the manager’s approach.
Other ETFs that demonstrated significant growth in RIA adoption include Amplify ETFs’ derivative income ETF, IDVO, which added 38 RIAs for a 74.5% growth rate. VanEck’s global moderate allocation ETF, RAAX, attracted 49 RIAs, marking a 74.2% increase. USCF’s commodities broad basket ETF, SDCI, also saw strong uptake, adding 32 RIAs and achieving 62.7% growth. These examples further illustrate the demand for specialized ETFs that cater to specific income needs, global diversification strategies, and tactical commodity exposure.
Demographic Trends in ETF Adoption
AdvizorPro’s data further revealed that the primary drivers behind the adoption of these newer and more specialized ETFs are RIAs managing assets between $1 billion and $100 billion. This segment of the RIA market often possesses the resources and sophistication to explore a wider array of investment vehicles and to integrate them strategically into their client portfolios. Larger RIAs, with their extensive research capabilities and established investment committees, are well-positioned to identify and implement complex ETF strategies.
The Premium for Risk Management and Complexity
A significant finding from the AdvizorPro report is the willingness of RIAs to pay higher fees for ETFs that offer robust risk management features. In the fourth quarter of 2025, RIAs were observed to be allocating to funds in the top decile for fees, particularly those employing long-short, market-neutral, and hedged income strategies. This suggests a growing appreciation for strategies that aim to protect capital and generate returns in a more controlled manner, even if it comes at a higher expense ratio.
Among these higher-fee, risk-managed ETFs, Convergence Investment Partners’ long-short equity fund, CLSE, added 69 RIAs, representing a 25.5% increase. iShares’ high yield bond ETF, HYGH, saw an addition of 88 RIAs, a 10.0% growth. Infrastructure Capital Advisors’ preferred stock fund, PFFA, also performed well, adding 173 RIAs, a 9.5% increase. These examples demonstrate that while cost is a consideration, RIAs are willing to invest in ETFs that offer sophisticated risk mitigation and tailored income solutions.
"Last year’s high-fee leaders were overwhelmingly defined outcome and options-based funds from First Trust and Innovator," the AdvizorPro researchers noted. "This quarter, the list broadens to include long-short equity, credit-hedged income and infrastructure, suggesting advisor willingness to pay for complexity is expanding beyond buffered products." This evolution in fee acceptance indicates a maturation of the ETF market, moving beyond simple beta exposure to embrace more intricate strategies that aim to deliver specific risk-return profiles. The willingness to pay for complexity is a testament to the growing sophistication of RIAs and their clients in seeking tailored investment outcomes that go beyond traditional passive approaches. The trend suggests that advisors are increasingly valuing active management within the ETF structure, especially when it comes to managing downside risk and seeking alternative sources of return.
