Liquid Alternatives: AuM of Actively Managed ETFs Shows 36% Add Y-on-Y

June 1, 2020 | Liquid Alternatives, News

2020 could be the year of active, says Douglas Yones, head of exchange-traded products at the New York Stock Exchange.

Investors are increasingly interested in targeted strategies inside an ETF product. More than half of ETF launches thus far in 2020 have been actively managed ETFs, observed Yones on CNBC’s ETF Edge. This year, therefore, might well turn out to be a breakout year for actively managed funds, according to Yones. (CNBC).

Actively managed ETFs

“We’re seeing net cash flow into those products — even just looking year over year at actively managed ETFs, about a 36% increase in assets under management,” Yones said in the interview. “For those investors that are looking for an active structure, they do seem to want to access that in an ETF wrapper.”

Consider the facts:

  • As a category, ETFs, on the whole, garnered $188 billion YTD, despite the crisis
  • ETFs have attracted positive cash flows every month of this year (even during the March sell-off)
  • 87 new products were launched during this period
  • BNY Mellon and Allianz are moving into this space
  • Of the total ETFs numbering 2,304 about 12%, or 280, are actively managed
  • Year-on-year, net cash flow into these products is up 36%

What’s checking the boxes

Investors can trade these offerings at zero commissions following the recent “race-to-zero” and no-holds-barred commissions’ war among brokerage giants.

“I think people who were looking to be nimble found that they did not have to worry about transaction costs as an impediment,” said Salvatore Bruno, chief investment officer at IndexIQ, on the same interview. “It enabled investors to move even more quickly throughout these more volatile times into and out of ETFs.”

For the issuers, active ETFs cost less and can be globally distributed, Yones pointed out.

There is now also a clear demand for active strategies. 2020, therefore, holds a lot of promise for actively managed ETFs.

Related Story:   ETFs Cushioned an Insane Market                                                                                                  

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