Fuse Blog

Active Fund Launches: Survival of the Fittest

FUSE examined active mutual funds and ETFs introduced after December 2012 to assess the percentage of these funds that reached certain AUM thresholds five years* after launch.

  • On average, only 9% of active mutual funds and ETFs attained $1 billion in AUM, improving to 16% achieving $500 million or more.
  • However, 49% of active funds ceased to exist before reaching $250 million in AUM, and this figure rises to 53% for those unable to attain $1 billion. This data underscores the competitive distribution landscape and headwinds for new products.
  • Launches have a better chance if they come from managers with greater scale and more resources. Our data finds that firms with $25 billion or more in AUM are more likely to have active mutual funds (23%) and active ETFs (20%) hit more than $500 million in AUM.

Overall Results of Launched Active Mutual Funds and ETFs After Five Years

Blog 5.29.24

* Funds that reached AUM thresholds were included even if they did not have a five-year history.
Source: Morningstar, FUSE Research