Displaying items by tag: active etfs

As 2025 approaches, municipal bonds and related ETFs present intriguing opportunities for fixed-income investors. Actively managed options, like the ALPS Intermediate Municipal Bond ETF (MNBD), are outperforming some passive counterparts, showcasing the value of active management in this space. 

Experts predict declining muni bond issuance in early 2025, creating a favorable supply backdrop for the asset class. Attractive after-tax yields, such as 6.1% for high tax brackets, are expected to sustain strong demand across mutual funds, ETFs, and managed accounts. 

Goldman Sachs Asset Management anticipates robust technical support for munis, highlighting net supply reductions and compelling credit opportunities. 

Finsum: For investors seeking accessible exposure, ETFs like MNBD simplify participation in the municipal bond market.

Active exchange-traded funds (ETFs) have become a major focus in the investment world this year, drawing significant attention from top fund companies. With over $800 billion in assets and an influx of approximately $250 billion in 2024, their growth is undeniable. 

Unlike mutual funds, active ETFs often capitalize on tax-efficient structures, such as in-kind transactions, which allow them to manage gains without triggering taxable events. Recent data indicates that only a small fraction of active ETFs distribute capital gains, making them attractive for tax-conscious investors compared to mutual funds, which tend to have higher payouts. 

Notably, many new active ETFs and clone strategies, launched alongside mutual fund versions, have kept capital gains distributions minimal. 

Finsum: This is a good sign of the trend in the regulatory environment and could pave the way for more efficient portfolio solutions.

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.