Bogleheads On Investing Podcast · bogleheads

Episode 80, Jeff Ptak, CFA, major trends in the mutual fund and ETF industry, host Rick Ferri

March 27, 2025·56 min·1 clip

4,400 mutual funds have been liquidated in three years—while ETFs grow exponentially.

Jeff Patek, Morningstar research director and CFA, discusses major mutual fund and ETF industry trends. Key data: 4,400 mutual funds closed (vs. 1,300 created); 1,700 ETFs created (vs. 642 closed). Paradox: active management declining in mutual fund format but growing in ETF format. Thematic ETFs peaked in 2021 (57 launches/year) but now average 17/year; average dollar invested underperformed by 14% annually vs. boring target-date 2050 funds. Leveraged ETFs (especially single-stock versions) show 5% outperformance but are designed for one-day holds—many investors hold years, causing volatility decay. Emerging trend: private equity entering ETF space (11% allocation to SpaceX in one fund) despite daily liquidity requirements creating valuation challenges. Discussion emphasizes investor behavior gaps and the persistent advantage of boring diversified investing.

As heard by us

A grounded look at fund trends, with practical detail on active ETFs and fund structure.

Jeff Patek joins Rick Ferri for a technical look at major shifts in the mutual fund industry, with the sharpest attention on actively managed ETFs.

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Why you'd press play

Want a plain-English map of where mutual funds, active ETFs, and interval funds are heading?

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