Actively managed exchange traded funds continue to gather inflows from global investors.
Active management is on the mend, and the exchange traded fund wrapper is a big reason why. Expect that theme to continue into 2021.
Advisors are looking critically at traditional market indexes and the challenges of navigating today’s new market environment.
“Actively managed ETFs and ETPs saw net inflows of US$7.28 billion during October, bringing year-to-date net inflows to a record level US$58.69 billion which is significantly more than the US$34.85 billion in net inflows gathered at this point in 2019 as well as significantly more than the US$42.10 billion gathered in all of 2019,” according to ETFGI, a London-based ETF research firm.
Lower Fees Are Far from Everything
There are times when advisors shouldn’t prioritize fees alone. Many asset classes embrace active management due to their superior results.
Some market observers believe that investors need to go beyond relying on past performance or buying the cheapest ETF. They are now incorporating a forensic approach to dig deeper into company fundamentals and their associated opportunities.
“Assets invested in actively managed ETFs/ETPs finished the month up to 2.8%, from US$228.41 billion at the end of September to reach a new record high of US$234.86 billion,” according to ETFGI.
In various forms and methodologies, actively managed funds are increasingly prominent parts of the ETF landscape. That growth trajectory could last for years.
“Fixed Income focused actively managed ETFs/ETPs listed globally gathered net inflows of $3.99 billion during October, bringing net inflows year to date to $34.73 billion, which is more than the $26.47 billion in net inflows Fixed Income products had attracted for the year in 2019,” notes ETFGI. “Equity focused actively managed ETFs/ETPs listed globally attracted net inflows of $3.18 billion during October, bringing net inflows for the year to $19.57 billion, which is significantly more than the $7.33 billion in net inflows equity products had attracted YTD in 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.