Average ETF Lifespan Collapses With Wall Street Antsy for Scale

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(Bloomberg) — Exchange-traded fund issuers are shutting new products at the fastest pace in years as competition for investor money intensifies.

The average lifespan of an ETF liquidated in 2026 has fallen to one year and nine months, according to a Bloomberg Intelligence report. That compares with an average age of three years and six months in 2025 and about four years and eight months in 2024.

The shorter lifespan comes as a record number of new ETFs enter the $19 trillion industry, where more than 1,000 products began trading last year. The influx has made it harder for new strategies to attract assets as fewer untapped corners of the market remain. In response, issuers are moving more quickly to close funds that fail to gain traction, according to Tidal Financial Group’s Aga Kuplinska. Closing an unpopular fund once carried a stigma, but firms are now more willing to cut their losses, she said.

Related:The Iran Conflict After One Month: The Most Impacted ETF Categories

“The idea of closing an ETF was almost embarrassing. These days, that’s no longer the case — you launch a product, adopt some metric that if the fund isn’t meeting in 12 to 18 months, let’s close it and recycle the resources,” said Kuplinska, senior vice president of product development at the firm. “There’s opportunity costs built into leaving a product on the shelf that’s not raising assets.”

In addition to the dropping lifespans, the number of closures is picking up as well. More than 40 ETFs were liquidated in the first two months of 2026, compared with 33 in the same period in 2025, according to Bloomberg Intelligence. Taken together, the figures suggest firms are “growing less patient with strategies that show few signs of early success,” Bloomberg Intelligence analysts Eric Balchunas and Andre Yapp wrote.

The ETF industry has attracted a number of new entrants in recent years as barriers to entry have fallen. But issuers need to think carefully about how they plan to scale their funds, said Todd Rosenbluth of TMX VettaFi. Distribution — getting ETFs onto brokerage apps and wirehouse platforms — is becoming more important as more firms enter the market, he said.

“You don’t just want to build an ETF — you want to grow an ETF, so distribution is a key differentiator,” Rosenbluth, TMX VettaFi head of research, said on Bloomberg Television’s ETF IQ. “Asset managers need to take a closer look at how they gather the money to get to that first $100 million, which is a key milestone for survival, instead of just bringing product to market and hoping that it grows.”

Asset managers will have different levels of patience for different types of funds, Kuplinska said. Bloomberg Intelligence data show that 36% of the ETFs launched in 2025 were leveraged or cryptocurrency-based. Those “trading tool” products are usually designed for a specific market environment and should not require a large distribution team to gather assets, she said.

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Related:Opening the Door, Not the Floodgates: The Real Impact of ETF Share Classes

“There are some products that will sell by themselves. These products should be considered for closure pretty quickly, 12 months plus,” Kuplinska said. “Other products that are more broad-based, traditional, those require time, they require a track record.”

https://www.wealthmanagement.com/etfs/average-etf-lifespan-collapses-with-wall-street-antsy-for-scale

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