ETFs Continue to Transform Portfolio Construction
Exchange-traded funds (ETFs) have become one of the most widely used investment tools among financial advisors. Over the past decade, the ETF market has grown dramatically, expanding from about $2.2 trillion in assets in 2015 to more than $13.5 trillion in 2025, with nearly 5,000 products now available to investors.
Why the rapid growth? ETFs offer several advantages that make them appealing in modern portfolio construction. They can provide broad diversification across asset classes, relatively low costs compared to many traditional mutual funds, intraday liquidity, and potential tax efficiency through their in-kind creation and redemption structure.
These features make ETFs useful building blocks for portfolios of many sizes and investment objectives.
Another important development is that ETFs are no longer limited to passive index exposure. Today’s ETF landscape includes active strategies, thematic investing, outcome-oriented funds, fixed-income ladder strategies, and even option-based income approaches. This growing toolkit allows advisors to tailor portfolios to specific client goals while maintaining the operational efficiency that ETFs provide.
If you're interested in learning more about how ETFs are being used in practice, I’ll be discussing these topics in an upcoming webinar:
“ETFs in Practice: Building Modern Portfolios”
April 23, 2026
The webinar will explore:
- The evolution of the ETF market
- How advisors are using ETFs for cost management, liquidity, and tax efficiency
- Portfolio construction strategies using ETFs
- The growing role of ETFs in model portfolios
We will also introduce Kaplan’s ETFs & Portfolio Construction Certificate Program, developed in collaboration with iShares by BlackRock, which helps advisors deepen their understanding of ETFs and how to integrate them into client portfolios.
If you’re working with ETFs in practice, I’d be interested in hearing how you are incorporating them into client portfolios.
