Table of Contents

• Introduction
• Executive Summary
• Are RIAs Concentrating or Diversifying ETF Allocations? 
• ETF Turnover Trends Among RIAs
• Top 10 Fastest-Growing ETF Issuers Among RIAs 
• Top 10 Fastest-Growing ETFs Among RIAs 
• Top 10 High-Fee ETFs Gaining RIA allocators
• Top 10 Newly Launched ETFs Gaining RIA Adoption 
• Top 10 ETF Categories with the Highest RIA Growth
• Adoption of Thematic ETFs Among RIAs 

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Introduction

The second quarter of 2025 underscored how ETF adoption within the RIA channel continues to evolve, balancing long-term structural growth with quarter-to-quarter strategic shifts. Our analysis leverages 13F filings, ETF profile data, and our proprietary RIA database to reveal a market that is both maturing and diversifying through Q2 2025, as RIAs layer new strategies on top of established core exposures.

In Q2 2025, 5,035 RIAs reported consistent ETF holdings via 13F filings, offering a robust sample for tracking changes in behavior.The mix of funds gaining traction points to emerging priorities: greater international diversification, expanded use of high-fee and options-driven products, and accelerating adoption of digital assets.

This report examines three dimensions:

• Concentration vs. diversification – whether advisors are consolidating into fewer funds or broadening allocations across more ETFs.
  
  
• Category momentum – which Morningstar categories and themes are drawing the most new advisor interest.
  
  
• Fund- and issuer-level breakthroughs – identifying the ETFs and managers capturing advisor attention in an increasingly competitive landscape.
  
  

Together, these insights provide a detailed view into how independent RIAs are shaping ETF demand in a shifting macro and product environment.

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Executive Summary

Q2 2025 revealed a selective but still expanding ETF adoption landscape among RIAs. The data shows a rebound from the relatively less active Q4 to Q1 period, with advisors re-engaging in ETF allocations following year-end portfolio resets. Digital assets, technology subsectors, and global bond exposures drove the quarter’s growth, while core categories like commodities provided stability.

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Q2 2025 Key Findings

• ETF adoption remains far from saturated - In Q2 2025, 57.8% of RIAs expanded the number of ETFs in their portfolios, while only 19.9% shrunk their ETF count. This underscores that advisors continue to add new strategies on top of their core holdings rather than simply recycling existing ones.
  
  
• Digital assets achieved another high growth quarter – Bitcoin ETFs, led by IBIT, saw a significant increase in RIA holding count (+205), marking the fastest-growing thematic allocation and reflecting mainstream continued acceptance despite performance turbulence.
  
  
• Technology leadership diversified – While core tech funds like VGT added over 100 RIA allocators, specialized subsectors (software, semiconductors, cybersecurity) also posted double-digit growth, highlighting a more selective, theme-driven approach.
  
  
• Global diversification accelerated – Categories such as global bonds (+36%), Latin America equities (+27%), and single-currency funds (+54%) saw strong RIA allocation gains, as RIAs expanded portfolios beyond U.S. large-cap equity.
  
  
• High-fee products gained credibility – Despite higher expense ratios, leveraged equity, options-based, and income-oriented ETFs led growth, showing RIAs will pay for differentiated strategies that deliver outcomes not found in low-cost beta.
  
  
• Commodities remained steady hedges – Gold ETFs (GLD, GLDM) continued to gain new RIA adoption, though growth slowed relative to Q1, as advisors balanced traditional hedges with higher-growth exposures.

Bottom line: ETF adoption among RIAs is broadening across both defensive and growth-oriented strategies. Advisors are more discerning in their selections, but the overall trend remains one of expansion, creating opportunity for issuers across asset classes, fee structures, and levels of specialization.

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Are RIAs Concentrating or Diversifying ETF Allocations?

Tracking the change in the average number of ETFs held per RIA firm over the past quarter (Q1 2025 - Q2 2025)

This analysis examines whether RIAs are concentrating their investments in fewer ETFs or diversifying across more offerings. By tracking the average number of ETFs per firm, we can assess whether advisors are consolidating holdings into select funds or broadening their exposure across multiple products.

Change in Number of ETFs Held per RIA (Concentration vs Diversification)

Key Takeaways:

• Net adoption surged: The gap between RIAs adding and trimming ETFs widened sharply from +4.8 pp in Q4 to Q1 to +35.6 pp in Q1 to Q2, showing net adoption increasing broadly across advisors. For issuers, this means distribution efforts should focus on winning incremental positions in portfolios, such as slots in model allocations or client accounts.

• Breadth of re-engagement: 57.8% of RIAs increased the number of ETFs they hold in Q1 to Q2, up from 41.8% in Q4 to Q1. That’s likely a broad-based re-entry into ETFs after year-end resets, consistent with the category strength we see in global bonds, tech subsectors, and digital assets elsewhere in this report. This also demonstrates that ETFs have not yet reached saturation as a tool within RIA portfolios.
  
  
• Defensive trimming eased: Only 22.2% of RIAs reduced ETF counts (vs. 37% prior quarter). Advisors appear less defensive and are layering on exposures, aligning with the rise in options-based, outcome-oriented, and select strategies that promise differentiated payoffs.
  
  
• Stickier cores, active edges: ~20% “no change” (19.9% vs. 21.2% last quarter) signals a stable core ETF set while RIAs rotate at the margins (“core-and-explore”). There is a large amount of AUM tied to this sleeve. Expect add-on allocations to be driven primarily by specialized funds rather than wholesale replacements.

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ETF Turnover Trends Among RIAs

Measuring how frequently RIAs added or removed ETFs from their portfolios over the past quarter (Q1 2025 - Q2 2025)

ETF turnover among RIAs provides insight into how frequently advisors adjust their ETF allocations - whether by adding new funds, removing existing holdings, or maintaining stable positions. By analyzing turnover rates, we can assess the balance between active reallocation and long-term ETF retention within RIA portfolios.

Key Takeaways:

• Moderate overall turnover: Average ETF turnover is 24.8% vs. a 14.0% median, showing most RIAs adjusted a relatively small portion of holdings while fewer very active firms lifted the average.

• Net additions dominate: RIAs added roughly twice as many ETFs as they dropped (17.9% vs. 9.8% on average), signaling expanding ETF exposure.
  
  
• Selective expansion: New positions often reflected adoption of emerging strategies or themes rather than wholesale portfolio changes.
  
  
• Core holdings remain stable: Low median drop rate (3.9%) underscores that most RIAs maintain long-term core ETF allocations.

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Top 10 Fastest-Growing ETF Issuers Among RIAs 

ETF issuers with the highest percentage growth in RIA allocators over the past quarter (Q1 2025 - Q2 2025)

This analysis highlights the 10 ETF issuers experiencing the highest percentage growth in the number of RIA allocators from Q1 2025 to Q2 2025. The rankings are based on the year-over-year percentage change, with issuers required to have a minimum of 50 RIA allocators in Q1 2025 to be included in the analysis.

Key Takeaways:

• High turnover at the top: Only three issuers appeared in the Top-10 fastest-growing lists in both quarters: BondBloxx, Defiance, and Neos. That’s a 30% carryover / 70% turnover QoQ, signaling a dynamic leaderboard. The repeat names map to sticky RIA demand in two areas: options-/income-oriented strategies (Defiance, Neos) and targeted fixed income (BondBloxx)

• Specialty and thematic issuers continue to surge – Leaders like AXS, Defiance, and YieldMax reflect RIAs’ growing appetite for differentiated strategies (options income, thematic, alternatives) rather than broad beta. This aligns with the wider industry trend of advisors searching for alpha-oriented ETF tools in a crowded market.
  
  
• Traditional players remain competitive – AllianceBernstein and AGF Investments breaking into the Top 10 show that institutional managers are increasingly targeting RIAs. With penetration still relatively low, firms blending institutional credibility with modern ETF products are well-positioned to capture growth.

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Top 10 Fastest-Growing ETFs Among RIAs

ETFs with the highest percentage growth in RIA allocators over the past quarter (Q1 2025 - Q2 2025)

This analysis highlights the 10 ETFs with the highest percentage growth in RIA allocators from Q1 2025 to Q2 2025. The rankings are based on year-over-year percentage change, with ETFs required to have a minimum of 50 RIA allocators in Q1 2025 to be included.

Key Takeaways:

• Complete turnover: None of last quarter’s Top 10 ETFs repeated in Q1 to Q2, showing how quickly RIAs rotate into new funds quarter to quarter.
  
  
• Global exposures dominate this quarter: The new Top 10 includes multiple global bond ETFs (IBND, KGOV, IAGG), foreign equity (IDMO, FDD, EEMA), and currency (FXY) — a pivot from last quarter’s focus on ultrashort bonds and options strategies.
  
  

Tactical risk-taking remains present: Alongside the international tilt, funds like QTUM (Defiance Technology) and NVDL (GraniteShares Leveraged Equity) show advisors are still selectively adding high-conviction, higher-volatility positions.

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Top 10 High-Fee ETFs Gaining RIA allocators

ETFs in the top 10% of expense ratios with the highest RIA growth over the past quarter (Q1 2025 - Q2 2025)

This analysis identifies the top 10 ETFs with the highest percentage increase in RIA allocators among high-fee ETFs, defined as those in the top 10% of expense ratios. The ETFs included had at least 50 RIA allocators in Q1 2025.

Key Takeaways:

• RIA demand for leveraged and options-based ETFs remains strong – Across both quarters, the growth leaders are dominated by leveraged equity and options trading funds (GraniteShares, Direxion, Innovator, First Trust). Despite higher fees, RIAs continue allocating here to capture tactical exposures and enhanced income strategies.
  
  
• High fees aren’t a deterrent when tied to innovation – Products with top decile expense ratios are still gaining share, reflecting that advisors are willing to pay a premium for strategies that provide differentiated payoffs (buffered outcomes, derivative income, or risk-managed equity).
  
  
• Repeat issuers highlight a sticky trend – Firms like Innovator ETFs, First Trust, and Direxion appear in both quarters’ high-fee growth leaders, showing they’ve established credibility with RIAs in delivering outcome-oriented products. 

• Broad diversification within high-fee category – The list spans trading tools (TECL, NVDL), outcome-oriented ETFs (Innovator’s UMPH, First Trust’s TJAN), and even niche fixed income (Angel Oak’s CAREY). This breadth shows RIAs aren’t just chasing one pocket of high-fee ETFs, but allocating across structures where unique exposures justify the cost.

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Top 10 Newly Launched ETFs Gaining RIA Adoption

The fastest-growing ETFs introduced within the last three years based on RIA adoption (Q1 2025 - Q2 2025)

This analysis highlights the top 10 ETFs launched within the past three years that experienced the largest increase in RIA allocator adoption from Q1 2025 to Q2 2025. These ETFs are ranked by absolute RIA allocator growth, with a minimum of 50 RIA allocators in Q1 2025. These results help identify which recent fund launches are finding product–market fit among independent advisors - and what categories are seeing early traction.

Key Takeaways:

• Niche fixed income products are breaking through – BondBloxx and DoubleLine made strong showings across the last two quarters with targeted high-yield, government, and core-plus bond ETFs, reflecting RIAs’ appetite for differentiated fixed income exposures in the current rate environment.
  
  
• Equity allocations favor creative structures over plain vanilla – Instead of broad-market trackers, new launches gaining traction include Pacer’s COWG and options-based funds from First Trust and Innovator, showing RIAs are embracing structured equity approaches for risk management and return enhancement.
  
  
• Momentum is building around alternative income – Neos, BondBloxx, and Panagram each saw new ETFs climb the ranks, underscoring that RIAs continue to seek higher-yielding or risk-managed income plays from younger issuers.
  
  
• Younger issuers are capturing real RIA share – Pacer, Simplify, Panagram, and Innovator consistently appear in these growth lists, proving RIAs are willing to allocate early to newer issuers if the strategy fills a gap.

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Top 10 ETF Categories with the Highest RIA Growth

Morningstar categories with the largest increase in RIA allocators over the past quarter (Q1 2025 - Q2 2025)

This analysis ranks the top 10 Morningstar categories by the percentage increase in RIAs allocating to them for the first time between Q1 2025 and Q2 2025. This reflects new advisor adoption of these categories rather than increased allocations from existing investors. The data highlights which investment themes and asset classes gained the most traction among RIAs over the quarter.

Key Takeaways:

• Global diversification leads: The biggest % gains came from Global Bonds, Latin America Stock, and Single Currency, showing RIAs leaning into international exposures as rate and FX themes play out.
  
  
• Digital assets reappear: After falling off last quarter’s list, Digital Assets returned with a +207 advisor increase Likely boosted by renewed momentum in spot Bitcoin ETFs and growing institutional acceptance of crypto as a portfolio sleeve.
  
  
• Fixed income remains central, but shifts: Instead of last quarter’s multisector bonds, advisors moved toward Global Bond, Hedged Global Bond, and California Munis, reflecting positioning around yield, duration, and regional interest-rate dynamics.
  
  

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Growing Adoption of Thematic ETFs Among RIAs 

Growth in Thematic ETF Adoption Among RIAs (Q1 2025 - Q2 2025)

Thematic ETFs are seeing strong growth among RIAs, reflecting increasing investor demand for specialized exposure in technology, digital assets, and alternative strategies. Our analysis highlights the top 10 thematic categories and individual ETFs that experienced the highest growth in appearances in RIA portfolios from Q1 2025 to Q2 2025.

Key Takeaways:

• Digital assets picked up traction – iShares’ IBIT keeps climbing in RIA appearances, moving from steady growth last quarter to the single biggest jump this quarter (+205). This reflects RIAs increasingly normalizing Bitcoin exposure inside client portfolios despite ongoing regulatory and volatility debates.
  
  
• Technology leadership broadens – ETFs like VGT, SHLD, SMH, IYW, and IGV show RIAs are diversifying their tech allocations across subsectors (software, semis, cybersecurity), not just broad tech benchmarks. This suggests a more selective, theme-driven approach to tech exposure.
  
  
• Commodities remain a structural hedge, but growth slows – From Q4 to Q1, gold-focused ETFs (GLD, IAU, GLDM) led thematic growth. This quarter, while GLD and GLDM still appear, the strongest growth shifted toward digital assets and tech.
  
  

Category-level shift: from defensive to growth-oriented themes – The last quarterly report highlighted commodities and regional equity funds (EWG, EPOL, etc.). Now, thematic momentum is concentrated in digital assets and technology, signaling RIAs are leaning back into growth and innovation-oriented themes.

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