Displaying items by tag: active etfs

Around two-thirds of active bond funds outperformed their average passive peers during the 12-month period ending June 30, according to Morningstar's latest Active/Passive Barometer. The report, which examines the performance of over 8,000 funds across various categories, highlighted that intermediate core bond funds led the way, beating passive funds 72% of the time. 

These active bond funds benefitted from narrowing credit spreads and inflation that kept interest rate cuts on hold. However, over a 10- and 15-year horizon, only 45.5% and 15.9% of these funds outperformed, respectively.

Additionally, actively managed real estate funds outperformed their passive counterparts 66% of the time over the same 12 months, with U.S. and global real estate funds seeing strong short-term success. 

Twin Oak ETF Company has introduced its first fund, the Twin Oak Short Horizon Absolute Return ETF (TOAK), which started trading on the NYSE Arca on August 20, 2024. The ETF will feature active management and securities with less than one year duration. 

It caters primarily to family offices and tax-conscious investors, offering a new option in the active ETF space. According to Twin Oak CEO Zach Wainwright, the fund combines high-quality portfolio management with the tax efficiency and accessibility of an ETF. 

Co-managed by Wainwright and Greg Stoner, the ETF marks the firm's first step in bringing institutional-level strategies to a wider audience. Twin Oak's goal is to offer innovative investment solutions through a tax-aware approach.

Finsum: These absolute return strategies aren’t without risk but they can be a way to generate less correlated returns in the current environment. 

J.P. Morgan Asset Management has appointed Travis Spence as the global head of ETFs, underscoring its strategic focus on leading the active ETF market. Spence, a 20-year veteran at the firm, will manage ETF product development, capital markets, and the newly established ETF insights team, while continuing to lead distribution across Europe, the Middle East, and Africa (EMEA). 

His previous leadership in expanding J.P. Morgan's active ETF presence in Europe positions him well to guide the firm’s next phase of growth. The global ETF platform has already expanded to nearly $190 billion across more than 100 products, securing J.P. Morgan's position as second in active ETF assets under management (AUM) and eighth overall globally.

Active ETFs continue to make strides in growth along their passive counterparts and have made substantial strides this year. 

Finsum: Active management is really about the harmony of merging quantitative insights with the best portfolio risk practices. 

The T. Rowe Price International Equity ETF (TOUS) is an active ETF that has gained attention for its diversification benefits, especially after a recent market sell-off. With a competitive 50 basis point fee, TOUS focuses on high-quality international firms with strong business models and good valuations. 

TOUS has an active strategy built around macro factors through an international lens that uniquely positions it for the type of interest rate volatility the US is experiencing. 

The fund’s active management allows for flexibility in selecting companies, particularly in non-U.S. markets, which could be advantageous during volatile periods. TOUS has returned 9.8% over the past year, making it an appealing option for diversification away from U.S. mega-caps.

Finsum: We’ve been banging the drum on the need to diversify into active funds during this volatility and this recent flash was an example why. 

Actively managed exchange-traded funds (ETFs) are projected to quadruple their assets to $4 trillion globally by 2030, according to BlackRock. 

These funds are gaining traction, making up 70% of U.S.-listed ETF launches in the first half of 2024, driven by investor demand for strategies that can navigate market volatility and offer potential outperformance. The growth of active ETFs has been facilitated by a 2019 SEC regulatory change, which lowered barriers to entry and encouraged innovation.

Despite their higher costs, active ETFs are increasingly popular for their tax efficiency and flexibility. BlackRock projects the overall ETF industry will double its assets to $25 trillion by 2030.

Finsum: Volatility is driving a lot of active investment inflows, but this trend is set to continue as so much uncertainty remains.