3 Active ETFs Outperformed the S&P 500 in September | ETF Trends

It has been suggested that active management has a greater ability to outperform in bear markets. 

All three major indexes were solidly in bear market territory by the end of September, meaning that each has fallen more than 20% from posted highs. 

September has historically been a bad month for investors, with the S&P 500 falling on average by about 1%, according to Howard Silverblatt, a senior analyst with S&P Dow Jones Indices. The S&P 500 – tracked by the SPDR S&P 500 ETF Trust (SPY) – fell more than 9% last month, its worst September in 20 years. 

While this sentiment toward active management is still being researched and evaluated for its merit, the three top-performing funds last month in ALPS’ lineup of ETFs – which all beat the S&P 500 – were all actively managed: the RiverFront Strategic Income Fund (RIGS), the RiverFront Dynamic Core Income ETF (RFCI), and the ALPS Intermediate Municipal Bond ETF (MNBD).

RIGS decreased 2.81% in September, holding up the best out of the firm’s ETFs, according to VettaFi.

RIGS is an actively managed global fixed-income portfolio that invests in various types of fixed-income securities without currency limitation. RIGS can hold almost any type of fixed-income security without regard to the type of issuer, credit rating, country of issue, currency of issue, or maturity. The only exposure guideline is a wide duration preference of two to 10 years, according to VettaFi.

RFCI is down 3.35% for the month, as of the end of September.

The fund is an actively managed portfolio with broad latitude to invest in various fixed income securities in almost any sector, maturity, or credit quality, targeting total return with a five-year investment timeline. RFCI has broad capabilities in terms of investment strategy and investable securities but with tighter boundaries than unconstrained peers. 

RFCI uses quant analysis and market conditions to select fixed income securities which may include U.S. and foreign government debt, high yield, emerging markets, mortgage-backed securities, asset-backed securities, convertible bonds, preferred shares, and municipal bonds.

MBND decreased 3.50% during September. Incepted in mid-May, MNBD is actively managed and offers exposure to investment-grade, intermediate-term municipal bonds that are exempt from federal income tax.

The fund’s investments may be fixed-, variable-, or floating-rate municipal securities that could include general obligation bonds and auction-rate municipal securities, according to VettaFi.

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