Data Confirm the Rapid Ascent of Active ETFs | ETF Trends

Advisors and investors continue warming to actively managed exchange traded funds around the world. The data agree.

“Active ETFs and ETPs gathered net inflows of US$8.24 billion during September, bringing year-to-date net inflows to a record US$51.48 billion which is significantly more than the US$29.41 billion gathered through Q3 2019 as well as the US$42.10 billion gathered in all of 2019,” according to ETFGI, a London-based ETF research firm.

Issuers believe the new active ETFs 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.

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.

“Assets invested in Active ETFs and ETPs increased 10.5% during September, reaching a new record of US$228.41 billion,” according to ETFGI’s September 2020 Active ETF and ETP industry landscape insights report.

Active Management: A Forensic Approach

Some market observers believe that investors need to go beyond relying on past performance or buying the cheapest ETF. They are now incorporating a more forensic approach that could dig deeper into company fundamentals.

In various forms and methodologies, actively managed funds are increasingly prominent parts of the ETF landscape and that growth trajectory could last for years.

Advisors are looking critically at traditional market indexes and the challenges of navigating today’s new market environment.

“In September, Active ETFs and ETPs gathered net inflows of $8.24 Bn. YTD through end of Q3, ETFs/ETPs saw net inflows of $51.47 Bn,” according to ETFGI. “Fixed Income focused Active ETFs/ETPs listed globally gathered net inflows of $5.25 billion during September, bringing net inflows through Q3 to $30.81 billion, more than the $22.74 billion in net inflows Fixed Income products had attracted through Q3 2019. Equity focused Active ETFs/ETPs listed globally attracted net inflows of $1.73 billion during September, bringing net inflows for the year through Q3 2020 to $16.39 billion, greater than the $5.89 billion in net inflows equity products had attracted for the year to Q3 2019.”

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.