ETFs
Investors flock to active ETFs: global ETF survey
U.S. investors may understand the growing popularity of domestically active ETFs, but global demand is also growing. Investors of all disciplines, from the United States to Europe and China, are flocking to active investment with ETFs. This discovery of the Brown Harriman brothers in his last investigation? advocates for greater attention to assets.
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Many active investors have already gotten into ETFs, but the concept is still a little misunderstood by many. ETFs offer tax advantages thanks to their creation/redemption model. At the same time, they offer significant transparency and traceability, given that they function like securities.
Active ETFs combine the fundamental research capabilities of active management with these advantages. This may be why so many investors around the world are considering adding active ETF allocations. Seventy-eight percent of respondents said they plan to increase their active exposure to ETFs over the next year.
Interestingly, just under half of those surveyed said they would move away from index mutual funds and into active ETFs. This suggests that active demand for ETFs may extend beyond the asset/liability discussion, but also cross product structures, from mutual funds to ETFs.
Additionally, while many investors are hesitant about active ETFs with low total assets under management, many respondents said even $50 million would be enough to feel comfortable investing in active ETF strategies. This could help open up the recent crop of active new launches and boost them to reach a wider audience.
Given the current back-and-forth between inflation and interest rates, investors may want to look for flexible active strategies. T. Rowe Price offers a variety of active options. For example, the T. Rowe Price Capital Appreciation Stock ETF (TCAF A-) stands out as a strategy. By charging just 31 basis points, it surpassed $1.5 billion in assets under management in just under a year, according to VettaFi data.