We have spent a lot of time talking about Innovation Growth Factors in the ETF industry. One factor we have yet to go in depth on is Active ETFs. With both traditional passive players Vanguard and BlackRock now entering this active ETF space, it is clearly time to dissect its growth.The three ways Toroso categorizes ETF strategies as: Traditional Beta, Smart Beta, and Active. Active is by far and away the smallest of these three by several figures, yet we believe significant growth is coming.
Out of the 2,164 ETFs, there are only 225 Actively managed ETFs with $52.4 Billion in AUM, only 1.5% of the ETF industry AUM. The average expense ratio is 0.54% for active ETFs and the 12-month revenue is $28.7 Billion, or approximately 3.8% of the ETF industry revenue.
Here are some statistics breaking down our insights with Active ETFs.
# Of Active US ETFs
Active US ETF AUM
As you can see, even though Active Equity ETFs make up 45% of the Active ETFs total, they only account for 19% of the assets. At the same time, Active Fixed Income surprisingly makes up the majority of Active ETF assets with fewer funds.
Another interesting find is that although Active Equities represent less than one half of a percent (0.4%) of total ETF Equity AUM, Active Fixed Income ETFs contrarily are 6.3% of total ETF Fixed Income AUM. Therefore, not only are there more assets in Active Fixed Income funds compared to equity, the Active Fixed Income funds carry more significance or weight on the entire Fixed Income ETF category.