Attention Economy Active ETFs: Visibility Over Performance

The Attention Economy Comes for ETFs: How “Active” Funds Became Marketing Machines

Active ETFs were once the poster child of modern investing — transparent, flexible, and cheaper than mutual funds but more dynamic than plain index trackers. They promised “alpha with liquidity.” Yet in 2025, a growing body of evidence suggests that many are no longer chasing alpha at all. They’re chasing attention.

A new study from Northeastern University finds that active ETF issuers increasingly design products to attract visibility, not necessarily performance. The finding may sound academic, but it captures a cultural shift investors can feel daily. The market has entered an “eyeballs over alpha” era.

How we got here

The modern ETF boom started in the 1990s as an efficiency story: low fees, daily liquidity, instant diversification. But the 2019 SEC ETF Rule changed the pace, allowing faster approvals and cheaper launches. Suddenly, anyone with a creative theme and a marketing plan could build a fund.

The pandemic years then poured fuel on the fire. Retail trading exploded, platforms like Robinhood gamified markets, and attention became its own asset. When Cathie Wood’s ARK Invest turned bold tech bets into daily talking points, it proved that an ETF could behave like a personality brand. In a sense, ARKK became the first influencer fund — a proof of concept that the right narrative could drive billions in inflows even through underperformance.

“That’s when active ETFs stopped selling process and started selling stories,” a Morningstar analyst wrote in a recent note. “The hook matters more than the holdings.”

From alpha to attention

The Northeastern researchers examined hundreds of ETF launches from 2020–2025 and found a growing emphasis on narrow, clickable themes — “AI infrastructure,” “quantum computing,” “future defence tech,” “on-chain real-world assets.” Many were marketed not through traditional prospectuses but through podcasts, YouTube explainers, and X threads. The marketing cadence mirrors creator culture: frequent updates, strong opinions, and direct engagement with followers.

In effect, these funds operate like media brands with tickers attached. Holdings shift not only with fundamentals but with trending narratives. Visibility becomes a key performance indicator. Every rebalance is a news moment; every manager comment becomes shareable content.

As one author of the study noted, “If you make an investment fund behave like a social feed, you generate volatility from engagement itself.” That volatility can ripple into the broader market when retail money clusters around the same ideas.

Case studies: when narrative beats numbers

The clearest example remains ARK Innovation ETF (ARKK). At its 2021 peak, the fund managed more than $25 billion and was one of the most mentioned tickers on social media. Yet by late 2022, it had lost over half its value while continuing to dominate conversation. ARK’s communications strategy — daily trades, open commentary, and bold macro takes — kept it visible long after its fundamentals faded.

Another recent standout is the Defiance Quantum Computing & AI ETF (QTUM). The fund, with less than $200 million in assets, has generated disproportionate traffic thanks to its positioning at the intersection of two buzzwords. Despite middling returns, it routinely trends on finance-oriented social feeds. The lesson is simple: attention equals distribution.

Meanwhile, more traditional active managers like Dimensional Fund Advisors — who deliberately avoid thematic packaging — have struggled to command similar mindshare online despite consistent results. The difference isn’t performance; it’s storytelling.

Volatility in disguise

Data from Morningstar show that roughly 70 percent of new ETFs launched since 2023 are thematic rather than broad-based. Many underperform the S&P 500 yet keep attracting assets because they dominate the discourse.
Investopedia notes that such funds often provide “the illusion of diversification.” Investors think they’re spreading risk across a theme when in reality they’re concentrated in a handful of correlated small- and mid-caps.

That illusion is dangerous because it hides how attention itself clusters. When multiple funds chase the same narrative, liquidity dries up the moment sentiment turns. Prices that were inflated by social buzz collapse just as fast.

The psychology behind the shift

Behavioral finance has long argued that investors seek stories as much as returns. After years of macro shocks — inflation scares, tariff wars, and currency volatility — a tidy narrative feels safer than another spreadsheet. A themed ETF compresses complexity into a single purchase: “AI innovation,” “cyber defense,” “clean transition metals.” It’s an easy way to feel positioned for the future without reading footnotes.

Our earlier analysis of stablecoins going mainstream showed the same psychology: people respond to access and narrative clarity more than to technical structure. The AI-stock boom carried a similar emotional charge — a belief that “this time, it’s real.” Active ETFs now channel that belief into managed products.

Inside the new marketing machine

The playbook is sophisticated. Many issuers track Google Trends, Reddit mentions, and X sentiment to decide when to highlight holdings. Some even adjust trading windows to coincide with news cycles. It’s an arms race for visibility — and it works.

According to Morningstar’s 2025 ETF Guide, funds with active social campaigns gather assets three times faster than peers, regardless of returns. Marketing has become alpha.

Regulators have noticed. The SEC has begun reviewing how ETFs communicate on social media, particularly when performance claims blur into promotional language. So far, oversight remains light, but the precedent is clear: attention is now material information.

When story fades, risk surfaces

Investors often discover the real structure of these funds only when the narrative collapses. Liquidity thins, spreads widen, and the ETF’s price can diverge sharply from its net asset value. Because active ETFs trade intraday, that disconnect can be swift.

The ARK ecosystem offered a glimpse of that in 2022, when heavy redemptions forced concentrated selling into illiquid growth names. Similar dynamics could play out across smaller thematic funds if a popular storyline — AI, defense tech, or tokenization — suddenly loses its audience.

Connecting the dots

The rise of attention-driven ETFs fits into a broader evolution we’ve been tracking on Green Candles Hub: finance absorbing the logic of the internet. Tokenized gold products promise “trustless stability” while trading like speculative tech. Meme coins borrow Wall Street language to sell community. And now, ETFs borrow influencer tactics to sell credibility. In every case, narrative is the new collateral.

This convergence also blurs boundaries between retail and institutional behavior. Hedge funds monitor retail chatter for entry points, while retail investors quote fund managers as if they were creators. Market structure has become conversational.

What investors should pay attention to

The key isn’t to avoid active ETFs altogether, but to recognize when a product’s main driver is visibility. Read how it’s described. Does the fund manager talk about portfolio construction, or about “being first to a future theme”? Is its social feed louder than its quarterly report? Those signals matter.

When the marketing outshines the math, you’re not investing — you’re participating in performance art. That might be fine for traders who know they’re riding momentum, but long-term investors should treat it like any other speculative wave: exciting, fleeting, and costly if mistimed.

Looking ahead: regulation, data, and new metrics

Regulators are unlikely to ban attention-based marketing outright, but new disclosure rules are possible. The SEC is already testing guidance that would require clearer labeling of thematic risk and turnover costs. Index providers may also start quantifying “sentiment exposure” — a metric describing how sensitive a portfolio is to online chatter.

Some analysts even envision funds designed to hedge attention — ETFs that short the most-mentioned stocks or rebalance away from sentiment extremes. If 2020s finance is about narrative cycles, then the next innovation may be financial products that trade on meta-narratives themselves.

A new definition of performance

The line between content and capital has officially blurred. For a generation raised on algorithms, visibility feels like validation. Fund managers have learned to meet investors where their eyes are — in feeds, not filings.

The Northeastern study ends on a sober note: performance metrics are starting to include engagement data. In the attention economy, the number of impressions may be as valuable as the number of basis points. That’s the paradox of modern investing — even the products built to escape speculation have become part of the show.

Active ETFs promised investors agility. They delivered it — but in ways no one expected.