Displaying items by tag: active etfs

Infrastructure is emerging as a core allocation for advisors, and BlackRock is seizing the moment with the launch of its first active infrastructure ETF, the iShares Infrastructure Active ETF (BILT). The fund builds on BlackRock’s $10 billion passive infrastructure ETF lineup and the firm’s $183 billion infrastructure footprint, bolstered by its 2023 acquisition of Global Infrastructure Partners. 

Managed by Balfe Morrison, BILT takes an active approach that aims to capture alpha in sectors such as utilities, transportation, energy, and data infrastructure, all of which are seeing heightened demand from AI adoption, digital growth, and shifting supply chains. 

At inception, utilities make up the largest allocation, followed by transportation and oil and gas, with about two-thirds of exposure focused on North America and select opportunities in Europe and Asia. With yields around 3%, infrastructure provides the income and downside protection investors expect, but Morrison stresses that BILT also offers meaningful potential for capital appreciation. 

Finsum: For advisors, the ETF offers diversification, inflation hedging, and exposure to long-term global trends, making infrastructure more relevant than ever in retirement and income-focused portfolios.

Tariff-related market volatility in 2025 highlighted the stabilizing role of fixed income, as broad bond indexes delivered 4% to 7.25% returns in the first half of the year, largely from higher coupon income. The April tariff announcement initially triggered a sharp sell-off in risk assets, but bonds held steady, underscoring their resilience compared to equities. 

While the most extreme tariff scenarios have been avoided, a projected U.S. weighted average tariff rate of around 12% is still expected to influence inflation, growth, and interest rate paths. Higher yields now provide a stronger income cushion than in prior years, reducing the downside impact of rising rates and enhancing potential returns if rates fall. 

Active fixed income ETFs can be especially well-suited for this environment, as managers can tactically adjust duration, credit quality, and global exposure to navigate tariff-driven market shifts. Investors are finding opportunities in high-quality bonds and global fixed income as hedges against policy-driven uncertainty.

Finsum: Tariffs remain a key macroeconomic variable shaping strategy, even in a more moderate form than initially proposed.

As investors seek diversification beyond U.S. stocks, active emerging markets ETFs may offer an edge over broad international equity funds for the rest of 2025. These markets currently trade at lower valuations than developed international equities, creating potential for stronger gains under favorable conditions. 

Active managers can exploit this by using fundamental research to identify the most promising companies. Emerging markets also feature younger firms well-positioned to benefit from global growth trends, particularly in technology and e-commerce. 

The Avantis Emerging Markets Value ETF (AVES), for instance, charges 36 bps and targets profitable, value-oriented companies, helping it outperform category averages with a recent 13.5% three-month return. 

Finsum: Active emerging markets ETFs present a compelling option for globally minded investors.

At the ETFs Summit hosted by S&P Dow Jones and the Mexican Stock Exchange, industry leaders predicted that active ETFs will continue growing rapidly, drawing market share not only from mutual funds but increasingly from structured notes. Structured notes—once prized for their customization—are losing ground as active ETFs replicate similar strategies with added liquidity, transparency, and without the counterparty risk inherent in notes. 

Retrocession fees no longer necessary, ETFs provide institutional-class access with real-time pricing, something structured notes cannot offer. While structured notes often come with hidden complexities and limited tradability, active ETFs deliver the same exposure with the ease of public market trading and daily liquidity. 

This shift is part of a larger industry trend: of 600 ETFs launched last year, 400 were actively managed, signaling innovation is now happening more through ETFs than through complex structured products. 

Finsum: As ETFs expand their reach across asset classes, including private credit and crypto, their dominance over less liquid, opaque vehicles like structured notes seems increasingly likely.

Capital Group and BlackRock both launched new active ETFs this week, reflecting how demand from advisors and asset allocators is pushing active ETF innovation into fresh territory. 

Capital Group unveiled three funds — a large-cap growth ETF, a large-cap value ETF, and a high-yield bond ETF — as it expands beyond its traditional mutual fund business and deepens ties with RIAs seeking tax-efficient, actively managed building blocks for their model portfolios. These new ETFs build on Capital Group’s push to support advisors with tools like its RIA Insider platform and its recent rollout of active ETF model portfolios. 

Meanwhile, BlackRock introduced the iShares Global Government Bond USD Hedged Active ETF, managed by its Global Tactical Asset Allocation team, to help diversify global bond exposure while protecting against currency swings. BlackRock’s new offering taps into growing advisor concerns over concentrated U.S. Treasury allocations and fits within its broader suite of institutional-grade active ETFs. 

Finsum: These launches highlight the shift in advisor priorities toward portfolio construction and model-based solutions, with active ETFs increasingly serving as the core tools for delivering customized, fee-based client strategies.