The 10 largest actively managed ETFs managed a combined total of $88.9 billion in assets, data from VettaFi show. Of the 10 largest active ETFs, half were bond funds, two were equity, two were commodities, and one was preferred stock.
Topping the list of active ETFs was the JPMorgan Ultra-Short Income ETF (JPST), with more than $19 billion in assets. JPST seeks to provide current income while seeking to maintain low volatility of principal by investing at least 80% of its assets in investment grade, U.S. dollar-denominated short-term fixed, variable, and floating rate debt. It may invest in corporate securities, asset-backed securities, mortgage-backed and mortgage-related securities, and high-quality money market instruments such as commercial paper and certificates of deposit.
Coming in second, with nearly $11.4 billion in AUM, is the PIMCO Enhanced Short Maturity Active ETF (NYSE Arca: MINT), a fixed-income fund that offers exposure to the ultrashort end of the maturity curve, focusing on corporate debt that matures within one year. MINT is extremely light on both interest rate risk and credit risk, and as such will generally deliver a very low expected return. According to an analyst report from VettaFi, “MINT can be a great safe haven to park assets in volatile markets and could outperform others in the category, but it has by far the highest expense ratio of the money market funds.”
Rounding out the top three ETFs is the Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF (PDBC), with $9.8 billion in assets. PDBC seeks to achieve its investment objective of long-term capital appreciation by investing in a combination of financial instruments that are economically linked to the world’s most heavily traded commodities. Furthermore, PDBC offers exposure to commodity futures without the tax hassle of a K-1. The fund also attempts to avoid negative roll yield, which could erode returns over time.
“Advisors are increasingly using active ETFs for a variety of investment styles,” said Todd Rosenbluth, head of research at VettaFi. “While some of the largest and oldest such ETFs are short-term fixed income-focused many other products have gained traction in recent years as client demand has broadened to equities and commodities too.”
This increased demand for active management is becoming particularly pronounced as both stock and bond markets continue to be volatile (stocks rallied on Tuesday after the S&P 500’s worst week in two years, and on Thursday, the yield on the benchmark 10-year U.S. Treasury note started at 3.2%, rose to 3.5%, then fell to 3.18% in just 15 hours).
T. Rowe Price offers a suite of actively managed ETFs. T. Rowe Price has been in the investing business for over 80 years through conducting field research firsthand with companies, utilizing risk management, and employing a bevy of experienced portfolio managers carrying an average of 22 years of experience.
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