ETFs entering 3.0 era: JPMAM

Thematic ETFs may be "more noise than actual trend", according to J.P. Morgan Asset Management (JPMAM) head of ETF, direct and digital, APAC Philippe El-Asmar.

Speaking at the JPMAM 2026 Asia Summit, El-Asmar said the rise in actively managed ETFs is bringing in a new wave of investing, calling it "ETFs 3.0."

"The buyers of leverage and inverse are not the typical buyers of ETFs. Typical buyers of ETFs use ETFs as long-term building blocks for their asset allocation. The buyers of leverage and inverse products are day traders or speculators that are looking for short-term benefits and fear of missing out," he said.

"So, the key message here is that leverage and inverse, as well as thematics could be more noise than actual trends or actual signals in the market. But active ETFs are here to stay."

El-Asmar said while active ETFs only constitute around 11.4% of the ETF industry today, they represent around 30% of net growth.

"Active ETFs are not new; they started in 2008, but in the last six years, they've been growing tremendously. What's also happening, which you should be aware of and concerned about to some extent, is product proliferation.

"On a global basis, there are now 16,000 ETFs. In the US, there are now more ETFs than there are single stocks. So obviously, with more products comes the need for investor allocation, because not all ETFs are created equal."

He said whenever a new equity product enters the market, it does so as a passive product which over time evolves. This is what he believes is happening in the ETF space.

"Every single market in the world starts with passive equity products, and then evolves to have specific single products, or commodities, or currency or the others. But ETF 3.0 for us is active," he said.

"In the last six years, [the active ETF] industry has been growing at about 50% per annum. And more specifically, within that active ETF industry, these outcome-based ETFs have been growing at an even higher percentage."

Financial Standard was a guest at J.P. Morgan Asset Management's 2026 Asia Summit.