Active Management ETFs Look Beyond the Index and Past the United States

International equities are prime asset classes for active managers to add value for their clients.

One asset class entering the limelight as 2020 draws to a close is international equities, a group many investors are looking to re-allocate to in the new year.

“Our analysis shows that active managers showed robust performance in some categories, but as a whole the outcome was at best average. The ‘success rate’ or proportion of active managers that survived and outperformed the average passive fund during the period was 54 percent,” reports Money Marketing.

Actively managed exchange traded funds are enjoying asset-gathering success this year, and it appears investors are awakening to the advantages offered by these products, particularly when it comes to international assets.

Emerging markets investors are once again back as world economies begin the recovery process from Covid-19. But they’re not simply throwing darts at a board.

Active Investments for the Long-Term

Active management can help investors identify dominant, growing businesses around the world today that may be overlooked by those unwilling to look beyond the index and think long-term.

“Managers within the Asia-Pacific ex-Japan and Europe small-cap Morningstar categories were the most successful during the period, with over eight out of 10 active funds beating the average passive. French-equity active managers also did well, with a success rate of 64 per cent. Managers in the remaining 10 categories did at best as well as the overall average of 54 per cent, but most came in below,” according to Money Marketing.

Developed Europe could be another region where active managers shine in 2021.

The European Union’s decision to create a 750 billion euro or $826.5 billion recovery fund to help the ailing economy has also boosted the euro.

“After an initially slow start, the euro area’s policy response to the virus shock is picking up pace, with additional spending measures announced recently by Germany and France. Combined with additional monetary support, the size of the stimulus is broadly sufficient to match the income shortfall on a euro area level, our analysis shows,” reports BlackRock.

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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.