Active ETFs are taking the world by storm - and this is its next frontier

Active ETF assets grew faster than the overall ETF industry

…and demand remains strong

Nearly three-quarters of ETF investors polled in the survey are currently investing in or are interested in investing in active ETFs. When asked if they plan to make any changes in the near term, over 70% of APAC respondents said they are looking to increase their exposure to active ETFs.

How do you expect your exposure to active ETFs to change in the next two to three years?

Why invest in active ETFs?

According to the Global ETF Survey 2024 by Trackinsight, investors typically tap into active ETF solutions to solve a variety of investment challenges, a notable one being diversification.

The active ETF market has become as diverse as the active mutual fund market, presenting a wide array of strategies that cater to a range of investment needs. This has helped position active ETFs as a viable and important portfolio-building block. Active ETFs span various asset classes and strategies, including research-enhanced indexing, unconstrained, and thematic strategies.

Fixed income ETFs: the next chapter

Since the launch of the first bond ETF in Canada in 2000, the fixed income sector has witnessed extraordinary growth and evolution. More than two decades later, fixed income ETFs have become increasingly commonplace and continue to occupy a critical position in some investor portfolios.

The shift towards active fixed income solutions in an ETF structure seems to be a logical next step. While not as popular as their passive counterparts, active fixed income ETFs are starting to gain traction among investors. A key reason is that active fixed income ETFs have the flexibility to allocate to the most attractive bond issuers, based on rigorous bottom-up credit research. This is unlike passive ETFs that tend to closely track bond indices and may not consider the quality of underlying companies.

What is your preferred investment strategy in the fixed income ETF space?

Advancing the possibilities of ETF investing

Through active ETFs, investors can combine the benefits of active management – be it performance enhancement or income generation – with the well-known advantages of a highly liquid and cost-effective ETF structure. Active ETFs are designed for dynamic markets. In the world of active ETFs, tap on the expertise of a leader in active management.