It’s no secret that 2025 set records for U.S. ETFs, pulling in more than $1T in fund inflows. Record inflows at a record place. And while ETF investing has been on a consistent uptick for years, last year’s momentum was striking. As of February 2026 – it shows no sign of stopping.
Here are two trends I noticed in 2025 that I expect to see a lot more of:
- Using Code Section 351 Nontaxable Contributions
In 2025, we saw an acceleration of investment advisers seeding newly created ETFs using Separate Managed Accounts (SMAs) with appreciated securities via Code Section 351 nontaxable contributions. We expect that trend to continue throughout 2026.
- Proliferation of ETFs with Non-Traditional Asset Mixes
Another trend we noticed in 2025 was the proliferation of ETFs with non-traditional asset mixes, such as ETFs with leveraged exposure, whether positive or negative, to a single name and ETFs seeking returns based on digital assets. Much like the increase we saw in Code Section 351 activity, we expect to see this non-traditional asset exposure continue to grow in 2026.
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