Active ETF Offerings may Surpass Passive Ones in 3-5 Years
Actively run exchange-traded funds are poised for a record-breaking $260 billion haul this year, driven by investors turning to alternative strategies beyond traditional benchmarks. State Street predicts a significant increase in flows into active ETFs compared to last year.
After a fresh torrent of inflows, actively run exchange-traded funds look poised for a record-breaking $260 billion haul this year as go beyond traditional benchmarks to ride alternative strategies, from selling options to riding cheap quant trades.managers have poured money into the active sector for 50 consecutive months after a $22 billion allocation in May, data compiled by show. With that momentum, , the fifth-largest manager, predicts into actively run ETFs may be almost double last year's record $140 billion tally. And sees the total number of such ETF offerings surpassing ones in the next three to five years.
So while the exchange-traded fund boom has garnered a reputation as nothing more than simple index-tracking flows, the latest data underscores the industry's evolution beyond its passive fame. "This pace is unlike anything we have seen," said Matthew Bartolini of , which oversees about $1.4 trillion in ETF . Investors are turning to active ETFs for returns that outpace benchmarks and also to target specific outcomes based on risk tolerance, he said.
It's early days. While active funds have raked in roughly $107 billion this year, or 32% of all ETF flows, they still amount to only 7% of the roughly $9 trillion in total ETF assets, BI data show. But as investors big and small seek portfolio diversification, actively managed vehicles are expected to gain fresh traction.
The assets aren't necessarily flowing to traditional bond- and stockpickers. Firms such as and JPMorgan Asset Management are leading the charge, accounting for almost 40% of total assets.
Source: Stocks-Markets-Economic Times
