The Division of Economic and Risk Analysis released two reports examining the characteristics of active ETFs and the changes in fees paid by investors when mutual funds and ETFs acquire other funds.

Dr. Joshua T. White, Chief Economist and Director of the Division of Economic and Risk Analysis, highlighted the importance of understanding the ETF market given its size and evolving nature. He noted that active ETFs are growing rapidly and now rival passive funds in number, reflecting a shift toward more actively managed strategies, while also noting that fund mergers can deliver meaningful fee reductions for investors.

The report titled "Fast-Growing Market of Active ETFs" found that despite representing a relatively small portion of total ETF managed assets, the number and assets of active ETFs have experienced significant, steady growth in recent years.

This growth has outpaced the growth rate of passive ETFs, with the number of active ETFs now close to the number of passive funds.

Active ETFs generally appear to have higher levels of active portfolio management, indicated by lower return alignment with underlying benchmark returns, higher portfolio turnover rates, and greater use of derivatives.

The second report, "When Funds Merge: What Happens to Fees? Evidence from Acquiring Mutual Funds and ETFs," explored how mergers are associated with changes to expense ratios, management fees, and Rule 12b-1 fees.

The analysis used data from 2010 to 2023 and focused on over 1,800 U.S. mutual fund mergers that occurred between 2011 and 2023.

The results suggest that mergers are generally associated with lower fees for investors in acquiring funds, with the size and type of savings varying by fund type and merger structure.

SEC staff also updated the Commission's public statistics and data visualizations webpage to include updated statistics on municipal advisors, transfer agents, and security-based swap dealers.

The webpage provides statistics presented in time series charts, pie charts, and heat maps to show market trends, distribution across categories, and geographic distributions.

The visuals are interactive and downloadable, allowing the public to explore the information they are interested in.