More than 240 active ETFs launched this year, taking the total to 1,329 funds with nearly $500 billion in assets, according to Morningstar Direct.
Active ETFs are investment funds that combine features of both traditional mutual funds and ETFs. Unlike traditional ETFs, active ETFs are managed by portfolio managers who make decisions to actively buy and sell assets with the aim of outperforming a specific benchmark; generating an alpha. This active management distinguishes them from passively managed ETFs that aim to replicate the performance of an index. Active ETFs offer investors the potential for active management strategies within the transparent and tradable structure of an ETF.
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