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Understanding active ETFs

Understanding active ETFs
March 18, 2021
Understanding active ETFs

We’ve written at length about the exchange traded funds (ETFs) attracting the most attention in recent weeks, from thematics to stock market trackers with an ESG twist. From concentration risks to understanding what actually sits in a portfolio, there are plenty of issues – interesting and concerning – that need discussing.

But what does the future hold for ETF users? Thematic and ESG offerings will likely continue to evolve, both in terms of the underlying methodologies and the investments they target. But one slightly newer concept continues to generate noise, even if it hasn’t really moved the UK market just yet.

A recent Brown Brothers Harriman survey tells us that active ETFs are now top of the agenda for professional investors in Europe. When the firm canvassed fund managers, advisers and institutional investors, active ETFs topped the list of offerings respondents in Europe would like to see more of, followed by cryptocurrency and ESG products. Half expected their use of active ETFs to increase in the next year.

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