The SEC's approval of ETF share-class structures arrives as the mutual-fund-to-ETF migration is already gaining traction.

According to Morningstar data cited by VettaFi, the industry has now surpassed 200 mutual-fund-to-ETF conversions, with a record 60 conversions completed in 2025 alone across 31 firms. Converted assets have climbed above $260 billion, highlighting how rapidly asset managers are embracing the ETF wrapper.

The ETF share-class relief could allow asset managers to keep existing portfolios intact while offering investors an ETF option alongside traditional mutual fund shares.

The Conversion Wave Is Already Producing Winners

The most successful example remains Dimensional Fund Advisors.

Dimensional kicked off the industry's largest conversion wave in 2021, moving roughly $29 billion from mutual funds into ETFs. Since then, the firm's converted funds have attracted more than $45 billion in net new assets, accounting for more than half of all post-conversion inflows industrywide.

Several of today's largest converted ETFs originated as mutual funds:

• Dimensional U.S. Core Equity 2 ETF DFAC (AUM of more than $47 billion)
• Dimensional International Value ETF DFIV (AUM of more than $20 billion)
• Dimensional U.S. Equity Market ETF DFUS (AUM of more than $20 billion)
• Dimensional U.S. Small Cap ETF DFAS (AUM of more than $15 billion)

These funds now rank among the most successful mutual-fund-to-ETF conversions ever completed, as of January 2026, according to ETFDb.

Bond Managers Are Joining The Rush

The trend is no longer limited to equity strategies.

Recent fixed-income conversions that happened in the past year include:

• DoubleLine Securitized Credit ETF DSCO, which converted from the DoubleLine Securitized Credit Fund earlier this year.
• Eaton Vance Mortgage Opportunities ETF EVMO, converted in August 2025.
• AllianceBernstein's municipal bond fund conversions completed in late 2025.

The shift is particularly notable because fixed-income mutual funds have historically been more resistant to ETF adoption. ETF issuers increasingly believe active bond strategies can benefit from the ETF wrapper's liquidity, transparency and tax advantages.

Lessons From Early Movers

The conversion movement has expanded well beyond boutique firms.

JPMorgan Asset Management converted roughly $7 billion of mutual fund assets into ETFs through multiple transactions, helping establish one of the fastest-growing active ETF businesses in the industry.

Meanwhile, BlackRock completed its first mutual-fund-to-ETF conversion by transforming the BlackRock International Dividend Fund into the BlackRock International Dividend ETF BIDD in 2024 and has since conducted such conversions regularly, signaling that even the world's largest asset manager sees growing demand for ETF structures.

Fidelity Investments has also converted around six actively managed thematic mutual funds into active equity ETFs. Goldman Sachs has also converted some mutual funds of its own.

The Real Threat To ETF Startups

Ironically, ETF share-class relief could create challenges for smaller issuers.

Many independent ETF firms have spent years building niche product lineups and competing for assets through innovation. If established mutual fund giants begin adding ETF share classes to billion-dollar portfolios, they could enter the ETF market with instant scale, recognizable brands, and extensive distribution networks.

That could intensify fee competition and make it harder for smaller providers to gather assets.

The Next ETF Boom May Not Come From New ETFs

The ETF industry's biggest growth story in recent years has revolved around crypto products, active strategies, and thematic investing.

But the discussion taking shape ahead of the ICI ETF Conference suggests the next transformation may be far less flashy.

Rather than launching thousands of new ETFs, asset managers may increasingly focus on converting or repackaging existing mutual fund assets. If that happens, the industry's next wave of growth could come not from new investment ideas, but from reengineering the structure of products investors already own.