Goldman Sachs says active ETFs are gaining as investors seek more choice

Active ETFs are no longer a side pocket of the market. Goldman Sachs says inflows into active ETFs as a share of all ETF flows have doubled since 2022, global active ETF assets are now nearly $1.8 trillion, and more than 85 percent of new ETF launches in the U.S. are active strategies. That is not just a product trend. It is a signal that the work inside Goldman Sachs Asset Management is shifting from selling cheap beta to explaining why a portfolio tool belongs in a client’s book at all.

What investors are actually buying

The cleanest way to understand the active ETF boom is to stop thinking about ETFs as a wrapper and start thinking about them as a delivery system for a job. Goldman’s Brendan McCarthy, the firm’s global head of ETF distribution, says clients want more choice in the ETF space and want to beat the market rather than merely track it. In practice, that means investors are asking for solutions that can generate income, manage risk, or pursue outperformance, not just low-cost index exposure.

That changes the client conversation. A wealth adviser no longer needs only to compare fees and tracking error. The discussion now includes whether an ETF is solving for retirement income, downside protection, active credit exposure, or a tactical allocation that would have been handled in a mutual fund or separately managed account a few years ago. For Goldman teams, that pushes the business closer to portfolio construction and away from product shelf economics.

The regulatory break that opened the door

The active ETF surge did not happen in a vacuum. The Securities and Exchange Commission adopted Rule 6c-11 on September 26, 2019, with the goal of modernizing ETF regulation and facilitating greater competition and innovation. Morningstar says active ETFs did not really take off until that rule change, which streamlined approvals and permitted custom baskets.

That detail matters inside Goldman because regulation shapes what can be built and how fast it can be brought to market. When approvals are quicker and basket mechanics are more flexible, the product team can think more creatively about structure, portfolio managers can adapt strategies to the ETF format, and the trading desk can work with more nuanced exposure design. The policy change helped turn active ETFs from a niche concept into a scalable business line.

The market has already moved past the experiment stage

The numbers now show a category that is broadening, not just growing. ETFGI said actively managed ETFs listed globally reached a record $1.63 trillion at the end of August 2025, with year-to-date net inflows of $377.13 billion and 4,058 actively managed ETFs across 43 exchanges in 34 countries. Morningstar said 295 active ETFs launched in the first half of 2025, excluding trading-tool products, and more than two-thirds of those launches were equity funds. It also reported that active ETFs surpassed passive ETFs in June 2025 by count.

Goldman’s own view is even more pointed: the firm says global active ETF assets were nearly $1.8 trillion at the end of 2025 and active flows were roughly four times stronger than passive flows on a percentage-of-assets basis. That is why the category is no longer a niche wrapper that complements the real business. It is becoming a core battleground for capital, shelf space and client attention.

Why this matters for Goldman’s product teams

For product builders, active ETFs force a different discipline. The old question was whether a strategy could fit inside an ETF wrapper. The new question is whether the wrapper improves the client outcome enough to win a place in the portfolio. Goldman’s framing makes clear that active ETFs are part of a broader evolution in the wrapper itself: fixed-income ETFs already changed access to bond markets, derivative income and defined-outcome ETFs are becoming more important for retirement funding and risk management, and private assets are emerging as the next frontier.

That widens the product mandate. Teams have to think about equity alpha, active fixed income, options-based income, defined-outcome structures and eventually private-asset access, all within one distribution platform. Goldman’s ETF platform crossed $100 billion in assets in late May 2026, and the firm launched its first ETF, the ActiveBeta US Large Cap Equity ETF, in 2015. The message from that arc is simple: the platform is no longer a proof of concept. It is a business line that has to keep expanding its menu without losing clarity.

What changes for distribution, wealth and client coverage

The biggest near-term shift is in how Goldman people talk to clients. Advisors and coverage bankers working with wealthy investors, institutions and retirement platforms now need to explain not just why an ETF exists, but what role it plays. That means speaking fluently about income generation, hedging, downside buffers and active management, not just performance against a benchmark.

This is where the career implications show up. A person who can translate a strategy into a portfolio outcome becomes more valuable in sales meetings, in internal reviews and eventually in promotion and bonus conversations. The skill set is less about memorizing product sheets and more about making the case that an ETF is the right tool for this market, this client and this allocation problem. At a firm like Goldman, that combination of technical fluency and commercial judgment is the kind of thing that can change an analyst into a revenue contributor, or a VP into someone a desk wants to keep.

The trading and capital markets edge

Active ETFs also raise the bar for the people behind the scenes. When strategies are more active, the trading and structuring desks need to think harder about liquidity, basket design and how portfolios behave in the market during stress. That is especially important in fixed income, where Goldman says active fixed-income ETFs and options-based strategies are among the main drivers of growth, and where less liquid underlying assets make execution and structure more consequential.

For market structure professionals, this is where the wrapper gets real. Passive products mainly ask for efficient replication. Active products can demand a deeper understanding of how to source liquidity, how to handle cash and baskets, and how to preserve the economics of the strategy while still trading like an ETF. That makes the business more interesting, but also more exacting. It rewards people who can bridge portfolio management and market microstructure, not just sit on one side of the divide.

Goldman’s ETF business is becoming a platform, not a sideline

Goldman’s 2026 acquisition of Innovator Capital Management sharpened that point. The $2 billion deal added 171 ETFs and brought Goldman’s global ETF count to about 240 at closing. Innovator is best known for defined-outcome products, which fit neatly into Goldman’s broader push toward income, protection and portfolio-engineering solutions.

Put together, the platform milestone, the acquisition and the market data all point in the same direction: active ETFs are not replacing every other vehicle, but they are forcing Goldman to build a more integrated business across product, distribution and market-making. The people who will matter most in that environment are the ones who can move comfortably between portfolio construction, client dialogue and trade execution. In other words, the ETF story is also a talent story, and Goldman is betting that the next wave of growth will belong to the teams that can make the wrapper do more than track a benchmark.