Looking for an active ETF that’s performing well and takes a special view? The ALPS Active Equity Opportunity ETF (RFFC) may appeal. The strategy’s broad remit makes it an intriguing option. When added to its performance, this speaks to its potential role as a nice overlay on top of core strategies.
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RFFC doesn’t just offer the flexibility that comes with an active ETF’s inherent avoidance of index tracking. It also explicitly looks across small, mid, and large-cap equity stocks. At the same time, it also includes REITs, too, an additional degree of flexibility. The strategy takes a bottom-up approach and looks for both dividend-paying stocks and securities with a high or improving return on capital.
What kind of stocks, then, has that led RFFC to? The strategy combines key tech names like Nvidia (NVDA) with big names outside the space like JPMorgan Chase & Co (JPM) and ConocoPhillips (COP).
So, how has the strategy performed in recent times? The active ETF combines long, medium, and short term returns. It has more than doubled the returns of its ETF Database Category and Factset Segment averages over the last five years. RFFC has returned 10.4% in that time. Over one year, meanwhile, it has returned 24.7%, also outperforming those metrics for that time.
Charging 48 basis points (bps), the strategy’s active approach could make a worthwhile add on top of core allocations. Its broad set of options, though with a U.S. focus, lets its managers look for the strongest options and lean heavily where needed.
Active strategies can add a lot on top of passive strategies, for example, that charge little but, by nature, don’t outperform necessarily. Taken together, an ETF like RFFC could make a worthwhile add entering the second half of 2024.
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