In spite of asset managers’ growing enthusiasm for the use of mutual fund/ETF hybrid shares, it might be some time before financial advisors start investing in such products on a large scale, according to the November 2025 issue of FUSE Research Network’s Advisor Trend Monitor.
Dozens of asset managers have filed applications for exemptive relief, seeking to create dual share classes of existing mutual funds or ETFs. In September, the SEC published a notice indicating its intention to grant permission for a dual-share structure to Dimension Fund Advisors, with broader approvals expected to follow. The government shutdown threatened to throw a wrench into that process, but for now it appears to be back on track.
However, FUSE Research found that about half of the 556 financial advisors it surveyed—51%—currently prefer investing in standalone ETFs vs. ETF share classes of mutual funds. Slightly less than a third (28%) expressed a strong preference for standalone ETFs, while 23% said they somewhat prefer them. Another 37% of respondents said they had no preference for either standalone ETFs or mutual fund/ETF dual shares.
In fact, only 13% of advisors said they prefer investing in a dual-share structure.
According to Mike Evans, director of advisor research at FUSE and the report’s author, some advisors might feel investing in a standalone vehicle is simply more straightforward. Mostly, however, advisors have not seen any major push from distributors for dual share mutual funds/ETFs because the latter are still trying to figure out how to handle hybrid structures operationally, Evans noted.
Evans added that some of the advisors included in the survey may already be investing in dual shares without realizing it, if they have invested in one of Vanguard’s passive mutual funds that also trade as ETFs.
“The Vanguard products have been around for many, many years, and many advisors have actually used them,” he noted. “The big challenge for asset managers is going to be getting big adoption from distributors. That’s going to be a very big factor in terms of speed of adoption. Our understanding is that distributors have been kind of hesitant.”
In addition, the report notes financial advisors expect to see lower fees for the hybrid structures compared to standalone funds. As a result, FUSE believes widespread adoption of dual share asset classes is still some way off in the intermediate to long-term future.
The FUSE survey included 556 advisors, working primarily across the wirehouse, independent broker/dealer and RIA channels. In all, 78% of the respondents fall within one of those groups. The average age of the survey respondents is 54, with a roughly even split between solo practitioners and those who work as part of a team. For those who work alone, the average AUM is $146 million, while the average team AUM is $476 million.
