Rise of Active ETFs: Are Mutual Funds Becoming Obsolete?
- Active exchange-traded funds (ETFs) now command 12% of the $15 trillion U.S.
- Amplify's Magoon told InvestmentNews that the firm has spent the last decade focusing on thematic bets, specifically targeting blockchain and covered call strategies.
- Specific risk assets are gaining significant traction, most notably Collateralized Loan Obligations (CLOs).
Active exchange-traded funds (ETFs) now command 12% of the $15 trillion U.S. As interest rate uncertainty persists, the growth of these vehicles is challenging the long-standing dominance of passive indexing and traditional mutual funds.
Thematic Bets and Complex Risk Assets
Amplify’s Magoon told InvestmentNews that the firm has spent the last decade focusing on thematic bets, specifically targeting blockchain and covered call strategies.
Opening Institutional Tranches to the Public
Specific risk assets are gaining significant traction, most notably Collateralized Loan Obligations (CLOs).
The Erosion of the Traditional Mutual Fund
The transition is reshaping the asset management industry. Because ETFs offer intraday liquidity and greater tax efficiency, Wealth Professional reports that analysts are now questioning if the era of the traditional mutual fund is closing.
This structural shift extends beyond U.S. borders. According to Caixin Global, active ETFs are expected to reshape asset management in China, offering professional managers a new mechanism to deploy strategies in a market historically dominated by closed-end funds or passive trackers.
Regulatory Minefields and Macro Pressures
ETF Stream reports that Morningstar is currently navigating a classification minefield as it struggles to standardize how active ETFs are categorized and compared against passive counterparts.