All rise for the active ETF

This week’s ETF coverage was all about the active ETF. The rise of the active ETF, if you will forgive the pun, as news came that that most active of ETF firms ARK Invest has bought European thematic firm Rize ETF from AssetCo, and will be moving into Europe. Tucked into the small print is this: "As part of this agreement, ARK and AssetCo will partner to support the launch, on the newly established ARK Invest Europe platform, of several ETF products for the River and Mercantile business, AssetCo’s active equity asset management subsidiary."

HANetf’s Hector McNeil commented: "The major shock of this is that we are seeing the entrance of the first pure, superstar active ETF manager from the US, where there has been explosive growth in actively managed ETFs. While active ETFs still account for less than 6 per cent of the US ETF market, they managed to garner 22 per cent of total net flows in the first six months of 2023, according to data from Morningstar Direct. At the same time, almost 70 per cent of ETFs launched in the first half of 2023 in the US were active.

Staying active, we featured the launch of Man Group’s AHL first ETF with American Beacon Advisers a few weeks ago but this week we brought you an interview with Jeff Ringdahl, President and CEO of American Beacon Advisors and Resolute Investment Managers, (which also has a relationship with ARK Invest) discussing their move into ETFs.

"Cathie [Cathie Wood, ARK’s founder and CIO] is a trail blazer and put actively managed ETFs on the radar and others are now comfortable with it," Ringdahl says. "Money gravitates to the thing that is the most client friendly and investment managers have had to become more comfortable with the structure that has full transparency."

Those clever people at Cerulli Associate have been at it again, with new research showing that, in Europe, only 17 per cent of the fund selectors and intermediaries report active ETFs are among the types of ETF they use most today, but 24 per cent are looking to use them more in the near future. "The European ETF market has seen many new product launches, fostered by strong product development and marketing efforts," says Fabrizio Zumbo, director of Cerulli’s European retail and wholesale asset management research. "We are seeing a higher level of specialisation in the vehicles available to European investors, who are increasingly familiar and comfortable with the ETF vehicle. Even so, the majority of assets are still allocated to passive ETF products."

Beverly Chandler, Managing Editor

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