Top Performing Active ETFs

July 06, 2017

[This article appears in our August 2017 issue of ETF Report.]

Actively managed exchange-traded funds remain a very small segment of the ETF world, and out of the 191 active ETFs by ETF.com’s count, exactly 10 ETFs have $1 billion in assets under management (AUM).

Of those 10, nine are fixed-income funds, with a master limited partnership (MLP) fund rounding out the actively managed ETF billion-dollar club. Below is a list of those 10 leading ETFs.

 

Fund Ticker Expense Ratio (%) AUM ($B)
PIMCO Enhanced Short Maturity Active ETF MINT 0.36 7.11
SPDR DoubleLine Total Return Tactical ETF TOTL 0.55 3.35
iShares Short Maturity Bond ETF NEAR 0.25 2.51
First Trust Preferred Securities & Income ETF FPE 0.85 2.27
PIMCO Active Bond ETF BOND 0.56 2.04
SPDR Blackstone/GSO Senior Loan ETF SRLN 0.70 1.79
First Trust Senior Loan Fund FTSL 0.86 1.28
First Trust North American Energy Infrastructure Fund EMLP 0.95 1.63
First Trust Tactical High Yield ETF  HYLS 1.11 1.20
Guggenheim Enhanced Short Duration ETF GSY 0.28 1.08

 

As to why fixed-income ETFs make up the vast majority of those active funds, ETF market researchers say part of this stems from exchange-traded fund market structure, while other reasons pertain to greater investment trends.

Fixed-Income Dominance

Michael Krause, president of AltaVista Research, said it makes sense that nine of these ETFs are fixed-income funds, because that category represents roughly 85% of all actively managed ETFs.

Fixed income also lends itself to active management, especially once investors review the funds’ construction.

“It's hard to make a passive bond fund that isn't strictly homogenous in its holdings. You're not likely to see an indexed bond fund made of an eclectic collection of credit securities,” said Brett Manning, senior market analyst at Briefing.com.

Elisabeth Kashner, CFA, director of ETF research at FactSet, says that when specifically looking at these 10 funds, two themes stand out.

“One theme is the limitations of indexing. By that I mean the nuts and bolts limitations; I don’t mean from an investment thesis point of view…. The other theme is that there are some segments with (almost) no passive options. That’s a market opportunity for passives,” she said.

 

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