Invest1 publisher2 min readPublished
Three-quarters of the single-stock ETFs trading at the end of 2025 launched that year
Morningstar says single-stock funds, leveraged and derivative ones included, account for more than half of ETFs whose first prospectus was filed by June 30. The ten biggest hold about 44% of the category's assets.
The Investor · Invest desk
What happened
- Morningstar found that more than half of ETFs with an initial prospectus filed on or before June 30 this year are single-stock funds, counting those that use leverage and derivatives.
- The same data show the ten largest single-stock ETFs account for roughly 44% of all assets held in the category.
- Canary Capital launched a staked ETF tracking the spot price of TRX, the native utility token of the TRON blockchain network, earlier this month.
- The 2019 ETF Rule ended the need for exemptive relief under the '40 Act, which made more complicated strategies easier to launch inside an ETF wrapper.
Compiled by The InvestorSomething wrong?How this is made
Why it matters
- constraint An advisor shopping outside the ten biggest single-stock funds is choosing among 387 vehicles that average about 0.14% of category assets each, where spreads and closure risk sit.
- decision At about 5.7 single-stock launches a week through 2025, product screening happens ticker by ticker, and diligence hours, not model-portfolio slots, become the limit on what gets considered.
- exposure If smaller issuers are launching to attract acquirers, as Tidal's Kuplinska describes, then shareholders in the tail funds depend on that acquisition bid persisting.
Strip the ten biggest funds out of ETF.com's end-2025 count and the category thins quickly. Those ten hold about 44% of single-stock ETF assets, an average of 4.4% each, while the other 387 funds divide the remaining 56%, or about 0.14% apiece [3]. Each of the ten carries roughly thirty times the assets of a typical fund in the tail [3]. The ETF.com figures cited do not include the category's dollar assets or the funds' expense ratios [5].
Launches ran ahead of assets. Of the roughly 397 single-stock ETFs on the market at the end of 2025 [6], 296 arrived during that year alone [7], leaving 101 from the three years since the products first became available in 2022 [1] [12]. One year nearly tripled the entire prior cohort [2].
Zachary Evens, passive strategies analyst at Morningstar, described the shelf. He said the market has grown from something like a stand at a farmer's market into a grocery store and then a Walmart, where almost anything is now available, good or bad [11].
According to The Daily Upside, those launch decisions reflect the economic reality of being an issuer in 2026 and not necessarily any large demand from investors [4]. Aga Kuplinska, senior VP of product development at Tidal Financial Group, named one version of that economics. "All these recent acquisitions, they only motivate smaller issuers more to do what they're doing," Kuplinska said [9]. "If you focus on highly specialized, differentiated markets, someone will want to pay for it" [10].
Fee income and acquisition value are two different businesses, and the concentration data points at the second. Management fees scale with assets, so a fund holding about 0.14% of the category's assets collects roughly a 0.14% slice of whatever the category pays in fees [3]. In my view most of these filings are cheap options on being acquired, and the premium is the cost of a prospectus and a listing.
Two findings would argue the other way. If the 2025 cohort gathers assets and the top ten's 44% share falls [8], the launches were product decisions and the demand was there. If acquisitions of smaller issuers stop while the filing rate holds, then something other than an exit is paying for the prospectuses.
What to watch
- Morningstar's next industry report, and whether single-stock funds hold above half of new ETF filings in the second half.
- Closure data on the 296 funds launched in 2025, which would show how much of the cohort ever gathered assets.
- Expense ratios disclosed in new leveraged single-stock prospectuses, the figure that would test the fee-income explanation.