Actively Managed ETFs Continue Their Stellar Growth Trajectory

Actively managed exchange traded funds are still a small percentage of the overall ETF universe, but at a time of remarkable inflows to ETFs of all stripes, active funds are getting a piece of the action and then some.

ETF research firm ETFGI notes that at the end of May, globally listed actively managed ETFs and exchange traded products (ETPs) had a combined $358 billion in assets under management – a new all-time high.

“Active ETFs and ETPs gathered net inflows of US$12.08 billion during May, bringing year-to-date net inflows to a record US$74.03 billion. Assets invested in active ETFs and ETPs finished the month up to 2.5%, from US$349 billion at the end of April to US$358 billion,” according to ETFGI.

The research firm points that flows to active fixed income ETFs are accelerating, potentially a positive sign for issuers looking to enter this fast-growing segment. That includes T. Rowe Price, which recently filed plans for three active bond ETFs: the T. Rowe Price Total Return ETF, T. Rowe Price QM U.S. Bond ETF, and T. Rowe Price Ultra-Short Term Bond ETF.

“Fixed Income focused Active ETFs/ETPs listed globally gathered net inflows of $6.84 billion during May, bringing net inflows YTD 2021 to $32.42 billion, more than the $9.50 billion in net inflows gathered YTD in 2020,” added ETFGI.

Active bond ETFs could continue being popular destinations for advisors and investors as market participants continue to contend with low Treasury yields and the specter of the Federal Reserve potentially accelerating its timeline to interest rate tightening. Of the top 10 active ETFs with the most inflows last month, five were fixed income funds and three were commodities strategies.

Data confirm that investors are also embracing the combination of active management and the ETF structure with equity funds, such as the T. Rowe Price Blue Chip Growth ETF (TCHP), T. Rowe Price Dividend Growth ETF (TDVG), T. Rowe Price Growth Stock ETF (TGRW), and T. Rowe Price Equity Income ETF (TEQI).

“Equity focused Active ETFs/ETPs listed globally attracted net inflows of $1.68 billion during May, bringing net inflows YTD to $33.38 billion, much greater than the $8.38 billion in net inflows YTD in 2020,” concluded ETFGI.

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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.