Key Facts
• Active ETFs were introduced in Japan in 2023, with 19 funds by July 2025.
• U.S. active ETFs reached 1,936 funds in June 2025, surpassing index ETFs by 1 fund.
• Japan’s active ETF market had a total balance of ¥55 billion by July 2025.
• U.S. active ETFs held $1.1 trillion, about 10% of the $11.3 trillion ETF market.
• Average balance per U.S. active ETF: $560 million (¥80 billion).
• Japan’s active ETF market saw slight net inflows in July 2025 but faced redemptions in May and June.
• U.S. ETFs benefit from tax advantages and low operational costs, driving mutual fund-to-ETF shifts.
• Japan considers including active ETFs in the new NISA investment framework.
• Active ETFs aim to outperform benchmarks through active management strategies.
Summary
Active ETFs, introduced in Japan in 2023, are gradually gaining traction, with 19 funds and a total balance of ¥55 billion by mid-2025. In contrast, the U.S. market has seen significant growth, with active ETFs surpassing index ETFs in number (1,936 vs. 1,935) by June 2025. Despite holding only 10% of the U.S. ETF market’s $11.3 trillion balance, active ETFs show strong business potential, averaging $560 million per fund. Japan’s market remains nascent, with limited growth and occasional redemptions. However, tax benefits, low costs, and potential inclusion in the new NISA framework could drive future expansion. Active ETFs represent a promising evolution in investment strategies, aiming to outperform traditional benchmarks.
