Active ETFs Grow in Popularity Amid Asset Manager Migration

Actively managed ETFs outnumber passive ones by a wide margin, with over 3,200 non-index trackers versus 2,100 index trackers. However, this simple categorization overlooks the diversity of actively managed ETFs and the unique risks they incur. Three main buckets of actively managed funds exist: fundamental/discretionary managers, systematic funds with rules-based investment processes, and alternative strategies like those from Dimensional Fund Advisors and Avantis Investors. Each bucket presents different risks and merits, making it crucial to consider these nuances when evaluating actively managed ETFs.