Gone are the days when investors preferred passively managed funds due to their low fee structure. Active funds are gaining precedence lately. The money outflow from active funds has fallen to its slowest pace since 2014, according to a report from Bank of America strategists,
as quoted on barrons.com. Active funds’ performance has improved substantially, the research says. Per ETFGI, record assets and net inflows of $404 billion and $88 billion, respectively, in active ETFs globally were noticed at the end of July. Actively managed ETFs and ETPs amassed net inflows of $6.00 billion during July, bringing year-to-date net inflows to a record $88.23 billion.
Notably, an actively-managed ETF does have a benchmark index but managers
may alter sector allocations, market-time trades or shift from the index constituents if they consider it appropriate, per investopedia.
Investors should note that active funds are arguably expensive as these involve research expenses associated with the manager’s due diligence and additional cost in the form of a wide bid/ask spread beyond the expense ratio.
Return-wise as well, active ETFs are not far behind. Some actively managed ETFs have outperformed the SPDR S&P 500 ETF SPY (up about 20%) this year. Below we highlight some of the top-performing active ETFs of this year that breezed past the S&P 500.
ETFs in Focus InfraCap MLP ETF ( AMZA Quick Quote AMZA - Free Report) – Up 49.37%
The InfraCap MLP ETF seeks total return primarily through investments in equity securities of publicly-traded master limited partnerships and limited liability companies taxed as partnerships. The expense ratio of the fund is 2.01% annually.
Amplify Transformational Data Sharing ETF ( BLOK Quick Quote BLOK - Free Report) – Up 41.8%
The Amplify Transformational Data Sharing ETF is an actively managed ETF that seeks to provide total return by investing at least 80% of its net assets in the equity securities of companies actively involved in the development and utilization of transformational data sharing technologies. The expense ratio of the fund is 0.71% annually.
Cambria Shareholder Yield ETF ( SYLD Quick Quote SYLD - Free Report) – Up 37.8%
The Cambria Shareholder Yield ETF utilizes a quantitative approach to invest in U.S. equities with high cash distribution characteristics. The fund charges 59 bps in fees.
Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF ( PDBC Quick Quote PDBC - Free Report) – Up 31.78%
The Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF is an actively managed exchange-traded fund that seeks to achieve its investment objective by investing in commodity-linked futures and other financial instruments that provide economic exposure to a diverse group of the most heavily traded commodities. The fund charges 59 bps in fees.
AdvisorShares Dorsey Wright Micro-Cap ETF ( DWMC Quick Quote DWMC - Free Report) – Up 31.72%
The AdvisorShares Dorsey Wright Micro-Cap ETF is an actively managed ETF that seeks long-term capital appreciation by investing in exchange-listed, micro-cap equities with sufficient liquidity. The expense ratio of the fund is 1.32% annually.
Avantis U.S. Small Cap Value ETF ( AVUV Quick Quote AVUV - Free Report) – Up 31.43%
The Avantis U.S. Small Cap Value ETF seeks long-term capital appreciation by investing primarily in a diverse group of U.S. small cap companies across market sectors and industry groups. The product charges 25 bps in fees.