July 1, 2021
ETFs have dominated the investment world for the last decade, as investors have sought to minimize risk while getting particular market exposure. Today, actively managed ETFs are trending in the ETF world. Since the start of the year, over two-thirds of ETFs launched have been actively managed funds. Active ETFs have advantages in volatile or uncertain environments because the set of risks can be adjusted ahead of time. Whether it's the Fed, booming retail investment news, or an ever-shifting infrastructure package, active ETFs have management that can respond. The data shows this too as they have held a higher percentage of winning stocks in the Russell 1000 index. Additionally, active funds have benefited from thematic investing such as ESG. In the end, these funds will remain popular until there is a semblance of normalcy in financial markets.
FINSUM + Magnifi: Active funds tend to come with higher fees but in this tumultuous environment they might be worth those higher prices.
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