Displaying items by tag: active etfs

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.

Derivatives income ETFs are gaining traction as investors seek lower-risk equity exposure with higher income potential, especially in volatile or flat markets. These funds, like Goldman Sachs’ Premium Income ETFs (GPIX and GPIQ), generate income by writing call options, which sacrifices some upside in strong markets but cushions downside performance and produces consistent cash flow. 

This strategy offers “lower highs and higher lows” versus the broad market, making it appealing for those seeking stability and income outside traditional fixed-income vehicles. The funds use dynamic options coverage and diversified strike selection to balance income generation with capital preservation, typically covering 25–75% of the portfolio depending on market conditions. 

Additionally, they offer potential tax advantages through return of capital distributions, which delay tax obligations until shares are sold. 

Finsum: With steady distribution rates and independence from interest rate movements, these ETFs are increasingly attractive for retirement portfolios and income-focused investors.

The bond market is undergoing a profound transformation as actively managed fixed-income ETFs gain traction among investors looking for more agile solutions. These funds combine strategic bond selection with the flexibility and transparency of the ETF format, offering a powerful tool for navigating an environment defined by volatility and uncertainty. 

Unlike passive strategies tied to static benchmarks, active managers can explore underfollowed sectors of the bond market, aiming for higher yields and stronger risk management. The ETF Rule of 2019 opened the floodgates for innovation, helping fuel a surge in actively managed ETF launches and inflows, particularly in fixed income. 

Investors are drawn to the structure’s real-time trading, lower embedded costs, and resilience in stressed markets—traits that are increasingly valuable in a dynamic rate environment. 

Finsum: Active fixed-income ETFs are becoming a key component of modern portfolio construction, reshaping how investors engage with the bond market.

The Invesco QQQ Trust and Invesco NASDAQ 100 ETF continue to serve as efficient vehicles for tapping into the performance of leading large-cap growth stocks through their tracking of the Nasdaq-100 Index. While passively managed, these funds remain highly relevant for active investors, especially as many portfolio managers increase exposure to familiar tech giants. 

During the first quarter of 2025, a temporary pullback in mega-cap names prompted several high-performing active managers to increase holdings in companies like Alphabet, Amazon, Microsoft, and Nvidia. 

These four names, which collectively represent over a quarter of the QQQ and QQQM portfolios, have shown resilience and strong earnings momentum, particularly in areas like cloud computing and artificial intelligence. Microsoft’s Azure business, for instance, exceeded expectations with robust demand for AI services, while Amazon rebounded following earlier weakness tied to trade concerns. 

Finsum: As fundamentals remain intact and investor interest stays elevated, these ETFs continue to offer a compelling entry point into the most influential names in the growth space.

In a turbulent macroeconomic environment, fixed income investments are regaining popularity for their ability to provide income, diversification, and potential capital appreciation. 

Experts at American Century Investments argue that active fixed income ETFs, like the American Century Multisector Income ETF (MUSI), offer strategic advantages over passive counterparts. Active managers can navigate beyond index constraints, tapping into overlooked sectors and exiting positions when valuations peak, unlike passive ETFs tied to benchmark requirements.

MUSI, in particular, leverages a data-driven approach to invest across diverse bond sectors—ranging from high-yield corporates to emerging market debt—with the goal of optimizing risk and return. 

Finsum: Expectations of upcoming interest rate cuts further strengthen the case for bonds, as falling rates could enhance bond yields.