Financial Advisers Boost ETF Usage, Favor Smart Beta Strategies
Nearly three-quarters of financial advisers have increased their use of ETFs over the past year, with VanEck’s 2026 Smart Beta Survey finding that 73% of advisers boosted their ETF usage. The primary driver for this shift is reducing total portfolio costs, cited by 49% of respondents, followed by changes in portfolio strategy at 42% and long-term active manager underperformance at 33%.
The survey highlights a growing trend in smart beta adoption, with 80% of advisers using at least one smart beta ETF, up from 72% in 2025. These strategies, which sit between market capitalization-weighted and active approaches, are being used to replace active strategies, with 64% of respondents doing so, up from 61% last year.
Arian Neiron, VanEck’s chief executive and managing director, Asia-Pacific, notes that the ETF industry is entering its next phase of growth, with smart beta expected to play a larger role in portfolio construction. He attributes this to the demand for cost-effective and tax-efficient investment options, as well as the shift from traditional unlisted managed funds towards managed accounts.
The survey reveals a 15% increase in the use of two or more smart beta ETFs within portfolios from 2025 to 2026. This trend is expected to continue, with half of respondents planning to increase their smart beta allocations in the next 12 months. The perception of smart beta’s value has also improved, with 80% describing it as good value for money, up from 74% in 2025.
VanEck forecasts that assets in smart beta index strategies will surpass $100 billion during 2028, up from the current $60.9 billion. Neiron states, “Now accounting for close to 16% of total industry assets, we think the current $60.9 billion allocated to smart beta index strategies will surpass $100 billion during 2028. The next 25 years won’t be defined by more ETFs, rather by smarter ETFs that investors and advisers can use to build well-diversified investment portfolios.”
Smart beta net flows have grown every quarter this year, from $2.38 billion in the first quarter to a record $3.66 billion in the third, reflecting its increasing role as a core portfolio allocation.
The survey’s findings show growing confidence in smart beta strategies, with 77% of advisers expecting them to become more prevalent in portfolios. Neiron adds, “The active versus passive debate is gathering pace, especially with active management strategies being challenged with underperformance for some time. More advisers are turning to systematic ETF strategies to target investment outcomes at a lower cost.”
Smart Beta Replacing Active and Traditional Strategies
The survey indicates that 64% of advisers are using smart beta to replace active strategies, an increase from 61% the previous year. Half of the respondents have also used smart beta to replace market capitalization-weighted strategies, a figure unchanged from 2025.
