The shift toward actively managed exchange-traded funds (ETFs) is showing no signs of stopping, a signal that investors are increasingly willing to hand over control of their portfolios to fund managers that are not following an index-based approach. Certainly, passive index ETFs still dominate when it comes to total assets, but actively managed funds are drawing a disproportionate share of new assets and, as a result, may have some of the most exciting and promising strategies for investors to explore.
As the share of total ETF assets found in actively managed funds has surged to about 12% from less than a third of that in 2020, investors seem to be appreciating the intraday liquidity, tax efficiency, and easy access of actively managed funds, despite their not being tied to indices. This structure does allow for some standout performance among active funds as well, including across both traditional and unique strategies.
