As advisors and investors evaluate new strategies and investment niches, actively managed exchange traded funds appear primed for growth.
Some advisors believe investors should be considering actively managed strategies, especially in the current market environment, when a more nimble manager may be better suited to navigate quickly changing conditions. Many companies in the mutual fund space are now getting in with the ETF business.
“With the creation of thematic, then smart beta, then active, and now the approval of (a new breed of active) ETFs, the traditional gap between ETFs and classic mutual funds has closed,” according to Traders Magazine.
Active ETFs: The Best of Both Worlds?
The new ETF wrapper offers the best of both traditional active equity and ETF worlds, highlighting value add through the alpha potential of active management, access to a growing array of active equity strategies, the advantages of the more efficient ETF structure, and the additional choice of structures that meet investor needs.
“Actively managed exchange-traded funds have been the biggest story that never quite happened every year for more than a decade. But thanks to the approval of a new kind of ETF, that’s starting to change,” reports Barron’s.
A recent JP Morgan Asset Management survey reveals “Active ETFs are most suitable for gaining exposure to a specific investment criteria, according to 58% of respondents, who also cited the ability to target specific investment outcomes (51%) and optimising tactical allocation (42%) in their top three benefits of the product,” according to International Investment.
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.
Investors should be considering actively managed strategies, especially in the current market environment, when a more nimble manager may be better suited to navigate quickly changing conditions.
For more on active strategies, visit our Active ETFs Channel.
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.