Most Popular Active ETFs

August 29, 2018

Sometimes the best intentions deliver unintended results. In our effort to deliver useful data on actively managed ETFs earlier this week, we got our numbers wrong. Our intentions were good, but our execution flawed. For that we sincerely apologize.

The list of most popular actively managed ETFs year-to-date isn’t led by a pair of ARK funds tapping into companies said to be on the cutting edge of their industries, as previously reported. The ARK Innovation ETF (ARKK) is, however, among the year’s most in-demand active ETFs, clocking in at No. 7, with net inflows of $760 million so far in 2018 (through Aug. 23).

ARKK is a sort of catchall ETF of ARK’s other funds. ARKK’s portfolio of 43 securities owns companies that would benefit from so-called disruptive innovation in industrial, genomics or Web x.0. Leading the portfolio is Tesla (TSLA), at 9% of the overall mix, according to our ETF stock finder tool. Other top holdings include Stratasys (SSYS), Intellia Therapeutics (NTLA), Invitae (NVTA) and Twitter (TWTR).

Perhaps unsurprisingly, ARKK allocates most to technology stocks, which comprise nearly half the portfolio. The fund is also one of only a few ETFs today to offer any exposure to bitcoin through an allocation to a closed-end fund, Grayscale Bitcoin Trust (GBTC), at 0.21%.

This combination of hot sector, hot crypto and unique exposure have boded well for a fund that has gathered more than $760 million in assets this year, growing to a total so far of $1.3 billion. ARKK has also delivered stellar performance this year, rallying almost 32% since the beginning of the year.

 

 

Beyond ARKK, here are the other funds leading net asset gains among actively managed ETFs this year:

 

Ticker Fund Issuer YTD Net Flows ($M) Total AUM ($M)
JPST JPMorgan Ultra-Short Income ETF J.P. Morgan 1,954.50 2,068.65
MINT PIMCO Enhanced Short Maturity Active ETF PIMCO 1,854.74 9,900.03
NEAR iShares Short Maturity Bond ETF BlackRock 1,518.15 4,399.59
PDBC Invesco Optimum Yield Diversified Commodity Strategy K-1 ETF Invesco  1,352.38 2,088.26
FTSM First Trust Enhanced Short Maturity ETF First Trust 995.98 2,435.17
SRLN SPDR Blackstone / GSO Senior Loan ETF State Street  983.04 3,341.27
ARKK ARK Innovation ETF ARK 760.13 1,303.69
LMBS First Trust Low Duration Opportunities ETF First Trust 607.15 1,557.30
COMT iShares Commodities Select Strategy ETF BlackRock 448.78 758.20
FTSL First Trust Senior Loan Fund First Trust 420.06 1,751.86

Data as of Aug. 23, 2018

 

Short-Term Bond ETFs In Demand

Four out of the top five most popular active ETFs are short-term bond strategies from issuers such as J.P. Morgan, PIMCO, iShares and First Trust. Each of these funds has gathered more than $1.3 billion each—the JPMorgan Ultra-Short Income ETF (JPST) is nearing $2 billion in net inflows year-to-date, closely followed by PIMCO’s MINT.  

Investors have been plowing assets into bond funds of shorter durations in the face of rising rates, which impact more negatively the longer end of the yield curve. So far in 2018, yields on 10-year Treasuries have gone up 48 basis points to 2.88% as of Aug. 29.

 

 

Commodity ETFs Gaining Traction

It’s also worth noting that the list of top asset gainers this year includes a pair of commodity funds. Investors have largely been reluctant to jump into commodity ETFs in recent years, but that tide seems to be changing in what seems to be a search for other safe-haven-type investments.

The Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF (PDBC), for example, is a basket of commodity futures that are selected with roll yield in mind—the strategy looks to avoid negative roll yield. But the fund also has a large allocation to Treasuries and debt securities due to its ’40 Act structure.

PDBC—which is notably cheaper than its veteran counterpart Invesco DB Commodity Index Tracking Fund (DBC)—at 0.59% in expense ratio, is one of the year’s most popular commodity ETFs, period.

The iShares Commodities Select Strategy ETF (COMT), has now taken in almost $450 million in net among commodity ETFs. Like PDBC, COMT also doesn’t generate a K-1 filing. COMT costs 0.48% in fees.

 

Charts courtesy of StockCharts.com

Contact Cinthia Murphy at [email protected]

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