Todd Rosenbluth, head of research at VettaFi, joined host Nate Geraci this week on ETF Prime to preview five key ETF stories to watch in 2026 following a record year that saw nearly $1.5 trillion in net inflows.

Rosenbluth highlighted small-cap ETFs as the rare investment style to incur net redemptions in 2025, with about $7 billion in outflows. Small-caps underperformed large-caps significantly, with the S&P 600 rising roughly 6% compared to the S&P 500, lagging by over 1,000 basis points. However, the gap narrowed to 100 basis points in the fourth quarter.

Most outflows were concentrated in the iShares Russell 2000 ETF (IWM) and iShares Core S&P Small-Cap ETF (IJR), which combined saw most of the $7 billion in redemptions. Rosenbluth is watching whether lower interest rates will drive persistent demand for these funds.

On artificial intelligence, Rosenbluth noted approximately $16 billion flowed into thematic ETFs, including AI, in 2025, accounting for more than half of all thematic inflows. The iShares AI Innovation and Tech Active ETF (BAI) gathered close to $8 billion.

Rosenbluth also pointed to tangential plays like nuclear and robotics. The Range Nuclear Renaissance Index ETF (NUKZ) was up 55% and the ROBO Global Robotics & Automation Index ETF (ROBO) gained 22% in 2025.

On high yield, Rosenbluth is watching flows despite historically tight credit spreads. High yield ETFs like the iShares iBoxx $ High Yield Corporate Bond ETF (HYG) and the iShares Broad USD High Yield Corporate Bond ETF (USHY) returned close to 9% in 2025, outperforming the Aggregate Bond Index. VettaFi data shows 38% of advisors still find high yield corporate bonds relatively attractive.

Industry Shifts

On the industry front, Rosenbluth expects ETF share classes of mutual funds to launch by the end of the first quarter from over 30 firms that have filed, including Dimensional Fund Advisors, BlackRock, and JPMorgan Chase & Co.

Rosenbluth is also watching the integration of Innovator ETFs by Goldman Sachs following their $2 billion acquisition expected to close in the second quarter. He views it as potential “one plus one equals three” synergy, combining Innovator’s defined outcome products with Goldman’s distribution network.

The episode also featured Cullen Roche, founder and chief investment officer of Disciplined Funds, who discussed his new book, “Your Perfect Portfolio,” and his firm’s recently launched defined duration ETFs.

Roche launched three ETFs in November 2025, targeting five-, 10-, and 20-year time horizons using an asset-liability matching framework to solve sequence of returns risk. The strategy treats the stock market as a long-duration instrument with approximately 18 years of duration and blends assets to match specific duration targets through counter-cyclical rebalancing.

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VettaFi LLC (“VettaFi”) is the index provider for NUKZ and ROBO, for which it receives an index licensing fee. However, NUKZ and ROBO are not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of NUKZ and ROBO.