In this article, Michael Mohr, Global Head of Xtrackers Products, takes some questions on the outlook for Exchange Traded Funds in 2026.
1. Which market trends will have the greatest impact on the ETF landscape in 2026?
The record inflows of recent years show that passive investment strategies have become firmly established among private and institutional investors. This trend will continue to grow, particularly in Europe, and I am therefore generally optimistic about the ETF landscape in 2026. The ETF landscape is now so diversified that investors have virtually unlimited opportunities to target different market segments and themes.
I continue to see the highest inflows in the major categories such as global equities from developed markets or individual themes. On the product side, I expect the differentiation mentioned above to continue, for example through further types of active ETFs or structures that offer attractive opportunities even in volatile market phases. In the case of active ETFs in particular, we are seeing an increasing number of new providers entering the market who want to use this segment as a gateway to ETFs.
It is important to me to emphasize one thing here: in the new year, the challenge will continue to be ensuring that the reputation of ETFs is not jeopardized by the large number of new providers. Providers like us, who have been serving the segment for many years, focus on clear transparency and carefully designed products. This must be preserved.
2. What role will thematic ETFs play in 2026?
We expect steady demand and interest in thematic ETFs to continue in the coming year, with specialized products that specifically reflect future topics or current trends.
- M&G pushes into active ETFs with £350m anchor and four-fund debut
- Pictet brings trio of active ETFs to the US market
- Dimensional Fund Advisors plots active ETF listings in London
3. How will the market for actively managed ETFs develop?
The market will continue to grow. We are seeing a large number of new providers entering the market. In addition to traditional ETF providers, these include previously purely active managers, US asset managers, and even completely new companies. With so many new products coming onto the market, there will also be an increase in marketing and communication on this topic.
We expect that, in addition to the main users to date — professional fund investors and asset managers — private clients and independent decision-makers will also become increasingly interested in active ETFs. Over time, there will be a clear focus on providers and products that manage to deliver on their promises in terms of performance and quality in the long term.
4. Will artificial intelligence already have a measurable impact on ETF strategies and product development?
There are already dedicated artificial intelligence and big data ETFs on the market. Our Xtrackers product is one of the largest in this area. In addition, AI is already incorporated into many ETFs via individual data points that are included in the construction of indices. AI is also increasingly being used to stabilize processes, data usage, and workflows in asset management and make them more efficient.
From our perspective, the introduction of AI into asset management is more of a gradual process than a big bang. However, it is important to pursue this path consistently because AI — when used correctly and in a controlled manner — opens up enormous opportunities.
5. Which regions or sectors do you see as particularly attractive for ETF investors in 2026?
Our analysts continue to see potential for European equities, especially the German market. However, US equities also offer good price opportunities in 2026 thanks to possible further interest rate cuts, particularly in the technology and communications sectors. The relative valuation of emerging markets compared to developed markets remains attractive, with superior earnings growth in emerging markets for 2026/27. For diversification reasons, the healthcare sector remains interesting, as do value stocks as a counterweight to the rather expensive technology sector.
6. What are the prospects for bond ETFs, particularly in the context of changing interest rate environments?
We launched further target maturity ETFs at the end of 2025. These products combine the advantages of bonds – such as a fixed term, more predictable potential interest income and repayment at the end of the term – with the diversification and liquidity advantages of ETFs. Despite slightly lower yields, we continue to view these as a good instrument for locking in current yields for the long term or for the desired period.
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