Wednesday, 15 June 2022 05:20

Ultra Niche ETFs Trending

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Active ESG Bond ETFs may be a mouthful, but they are also where the market is headed. Most passive bond ETFs have been left in the dust tracking big indexes and getting killed on rising rates with too much exposure to government bonds. Active bond funds have a wider array of maneuvers, and can act more swiftly in order to keep pace with the market. The case for active equity is more difficult, but in macro environments and when so many investors are moving rapidly into ESG fund managers have an edge at selecting bonds that will outperform. The additional exposure to ESG is a subsector that has outperformed market benchmarks because of the rising demand from a new wave of investors. Additionally fund managers seem to outperform within ESG as well because they have a more discerning eye.

Finsum: There has been a second coming for active ETFs and that will only continue if the Fed has to stomp on the brakes.

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