Multi-Strategy ETFs Poised for Growth, Targeting $120B in AUM by 2026 Amid Diversification Demand

Multi-strategy ETFs are emerging as a dominant force in the ETF landscape, with industry projections indicating they will manage $120 billion in assets by December 2026, up from $68 billion in 2024. This represents a compound annual growth rate of approximately 22% over the forecast period. The expansion is fueled by institutional and retail investors seeking balanced exposure across equities, fixed income, alternative assets, and managed futures through a single vehicle. The trend reflects a broader shift toward risk mitigation and portfolio resilience. Leading providers such as BlackRock, Vanguard, and State Street have launched or expanded multi-strategy offerings, with BlackRock’s iShares Multi-Strategy ETF (Ticker: MSTR) alone capturing $17 billion in assets since its 2023 launch. These funds typically employ dynamic asset allocation models, rebalancing across strategies based on market conditions and volatility indicators. The rise of multi-strategy ETFs also correlates with increased adoption by defined contribution plans and wealth management platforms. Data from the Investment Company Institute shows that 38% of new retirement accounts opened in Q3 2025 included multi-strategy ETFs, up from 22% in 2023. This adoption signals growing confidence in the ability of these funds to deliver consistent risk-adjusted returns across market cycles. Market impact is evident across asset managers and trading volumes. High-frequency trading desks report a 40% increase in order flow related to multi-strategy ETFs since Q1 2025, while secondary market liquidity has improved, with average spreads narrowing to 0.08% across the sector. The segment is also attracting regulatory scrutiny over transparency in strategy allocation, prompting some firms to enhance disclosure protocols.