Displaying items by tag: active etfs

Active taxable fixed-income strategies are attracting renewed interest as many investors recognize that the bond market’s complexity can create opportunities for skilled managers to add value. 

Rather than relying solely on broad benchmarks, these funds aim to navigate shifting interest-rate environments, credit cycles, and liquidity constraints more dynamically. The strongest offerings span a wide range of categories, from ultrashort and short-term bonds to intermediate core, core-plus, and even emerging-markets debt, giving investors multiple ways to tailor portfolios. 

For most, intermediate bond strategies remain the backbone of a diversified fixed-income allocation, while short-duration funds offer stability for money needed in the near term. Costs remain a key factor, as lower-fee share classes and ETF structures often provide a clearer path to outperformance. 

Finsum: High-quality active bond funds offer investors a compelling way to seek better risk-adjusted returns.

Emerging market (EM) bonds are increasingly attractive as EM governments have shifted from deficits to surpluses, while developed markets (DM) have accumulated debt and fiscal imbalances. EMs maintain stronger fundamentals, including lower government and private debt, greater central bank independence, and higher real policy rates, factors that enhance stability and yield potential. 

Unlike DMs, EM policymakers have generally resisted moral hazard, allowing inefficient firms to fail rather than absorbing private risk, preserving long-term financial health. Over the past three decades, EMs have achieved persistent current account surpluses through fiscal discipline, contrasting with DMs’ crisis-prone fiscal dominance and policy coordination.

Actively managed EM strategies, such as VanEck’s, have demonstrated resilience through global shocks, reinforcing the case for a strategic EM debt allocation in modern portfolios.

Finsum: With DMs constrained by debt and low yields, EM debt offers compelling diversification benefits, higher returns, and sounder fundamentals.

Assets in European active ETFs have more than doubled in two years to reach €62.4 billion, though they still make up only 2.6% of Europe’s total ETF market—far behind the 10.2% share in the U.S., signaling early-stage adoption. Investor interest is rising, with €13.4 billion in inflows so far in 2025 following €18.4 billion in 2024, yet active ETFs still represent just 6% of total European ETF flows. 

JP Morgan continues to dominate with a 56% market share, followed by Fidelity and Pimco, while new players like HSBC, Avantis, and Goldman Sachs are intensifying competition and pushing fees lower. 

Equity offerings are mostly “shy-active”, benchmark-aware strategies seeking modest outperformance, while fixed-income active ETFs have quietly excelled, expanding into complex areas like CLOs and mortgage-backed securities with strong early results. 

Finsum: Overall, Europe’s active ETF market is maturing rapidly, blending innovation, cost competitiveness. 

As investors prepare for year-end taxes after a volatile 2025, many are exploring ways to reduce their tax burden through strategies like tax loss harvesting and structural portfolio adjustments. Active ETFs, according to T. Rowe Price’s Kevin Signorelli and Chris Murphy, can play a key role in minimizing tax impacts. 

ETFs inherently generate fewer taxable events than mutual funds due to their creation and redemption mechanism, which limits capital gains distributions. Active ETFs add further efficiency, often operating at lower costs while maintaining flexibility to manage holdings strategically. 

They also offer effective vehicles for tax loss harvesting, allowing investors to shift from underperforming funds into more promising active strategies, such as international or tech-focused ETFs. 

Finsum: As active ETFs continue to expand, they provide investors with more tools to optimize portfolios for both performance and tax efficiency.

The ETF market continues to expand as more firms convert mutual funds into ETFs, with a major asset manager completing the shift of its $1 billion unconstrained debt fund into the JPMorgan Flexible Debt ETF (JFLX). 

The fund charges 45 basis points and is designed to provide long-term total return through both current income and capital appreciation. JFLX has the flexibility to invest across a wide range of debt instruments, including bonds, loans, convertible securities, and money market holdings.

Its managers can actively adjust allocations across markets and sectors in response to changing conditions, positioning the fund as a versatile fixed income option. The move reflects rising investor interest in active, transparent ETF structures during periods of volatility. 

Finsum: With active ETFs adaptive strategies, these ETFs could serve as a core or complementary fixed income holding for investors.