The Data Behind the Active ETF Surge
A 2026 MSCI ETF Intelligence Survey covering 450 advisers across the United States and Europe has quantified a trend that Philippine regulators and asset managers would be wise to study closely: 71 percent of surveyed advisers intend to increase their allocations to actively managed exchange-traded funds over the next two years. More strikingly, 87 percent of advisers already hold active ETF positions, while 58 percent indicated they would likely replace existing mutual fund or UCITS holdings with newly launched active ETFs from their managers.
Substitution, Not Addition
The MSCI findings challenge a common assumption that active ETF growth represents incremental capital entering investment markets. Instead, the data suggests a substitution dynamic: active ETFs are increasingly cannibalizing shelf space previously occupied by mutual funds. Half of respondents expressed a preference for migrating to the active ETF version of strategies they already use, and 85 percent of fund selectors reported openness to ETF share classes of the same strategy.
This substitution pattern carries particular relevance for the Philippines, where unit investment trust funds (UITFs) have long served as the primary collective investment vehicle for retail investors. The PSE’s proposed 2026 ETF rule amendments explicitly expand eligible issuers to include UITFs, creating a regulatory pathway for existing UITF managers to potentially launch ETF share classes or parallel active ETF products.
Regulatory Tailwinds Accelerate the Shift
The MSCI survey attributes part of the active ETF momentum to regulatory developments. In March 2026, the U.S. Securities and Exchange Commission cleared the final step of relief allowing broker-dealers to trade ETF shares in multi-class funds, enabling asset managers to combine mutual fund and ETF shares within a single portfolio. While this specific U.S. regulatory change does not directly govern Philippine markets, it establishes a global template that Philippine regulators and asset managers are likely to monitor.
The Philippine SEC and PSE have demonstrated similar directional intent. PSE Circular No. 2026-0029 explicitly permits actively managed ETFs, while the reduced capitalization threshold of ₱50 million—and as low as ₱1 million for established investment companies—makes ETF issuance accessible to a broader universe of domestic managers.
Liquidity and Transparency Concerns Persist
The MSCI data also reveals adviser hesitancy in certain areas. While 49 percent of respondents expressed interest in accessing private or less liquid assets through ETF structures, only 16 percent considered private markets a suitable fit. Liquidity concerns dominated the skepticism: 62 percent viewed ETFs as somewhat mismatched relative to the underlying assets, while half cited valuation transparency worries and 44 percent pointed to insufficient track record.
For Philippine asset managers contemplating active ETF launches, these findings suggest that success will depend on strategy selection. Active ETFs tracking liquid, transparent public market strategies are likely to encounter smoother adoption than those attempting to wrap illiquid private assets in an exchange-traded wrapper.
Implications for Philippine Product Development
The MSCI survey’s most actionable insight for Philippine market participants may be the demonstrated willingness of advisers and investors to migrate from mutual fund structures to ETF structures when given the option. As the PSE’s proposed rules move through consultation and toward targeted fourth-quarter approval, asset managers with existing UITF or mutual fund offerings face a strategic decision: preemptively develop active ETF capabilities or risk losing shelf space to competitors who move first.
