Actively managed ETFs remain popular investment vehicles among investors who believe the right portfolio managers can beat the market. This year, Active Equity ETFs received $13.11 billion of net inflows, a meager amount compared to Passive Equity ETFs, which netted $160 billion over the same period. America-domiciled Active Equity ETFs scooped in 99% of the net inflows. Meanwhile, Europe witnessed minor outflows of $55 million (net) and APAC – net inflows of $155 million.
Recently, S&P DJI released their semi-annual SPIVA research which measures actively managed funds performance against their relevant index benchmarks worldwide. The research covers funds in Australia, Canada, Europe, India, Japan, Latin America, the Middle East, South Africa, and the United States. Read Active ETFs: Not a magic bullet.
The full-year 2021 results show that in 16 of the 18 categories tracking U.S. equities-focused funds, more than half the funds underperformed their benchmark. On the other hand, half of the European equities-focused funds in 3 out of 8 categories were able to beat their benchmarks.
3 most popular Active Equity ETFs in America
Among the most popular active ETFs (in terms of net inflows) in America, this year are JPMorgan Equity Premium Income ETF (JEPI, $1.68 billion), ARK Innovation ETF (ARKK, $1.07 billion), and Avantis U.S. Small Cap Value ETF (AVUV, $510 million).
JEPI seeks to deliver a significant portion of the return associated with the S&P 500 Index with less volatility, in addition to generating a monthly income stream from associated option premiums and stock dividends.
In terms of sector exposure (as of March 23rd, 2022), healthcare has the highest weighting (12.5%), followed by industrials (12.5%), information technology (11.2%), and consumer staples (11.1%). The fund is well-diversified with 113 holdings, with each holding accounting for <2% of the total portfolio (as of March 22nd, 2022)
JEPI has a total expense ratio of 0.35% and trades primarily on the NYSE Arca. A $10,000 investment in JEPI on April 4th, 2020, would be worth $13,697 by February 28th, 2022 (+37%).
3 most popular Active Equity ETFs in Europe
In Europe, Fidelity Sustainable Research Enhanced US Equity UCITS ETF (FUSS, $410 million) JPMorgan ETFs (Ireland) ICAV - Global Research Enhanced Index Equity (ESG) UCITS ETF - Acc – USD (JREG, $144 million), JPMorgan ETFs (Ireland) ICAV - Global Research Enhanced Index Equity (ESG) UCITS ETF (Acc) - GBP Hedged (JGEP, $129 million), and JPMorgan ETFs (Ireland) ICAV - Global Emerging Markets Research Enhanced Index Equity (ESG) UCITS ETF - Acc - USD (JREM, $127 million) were among the most targeted active equity ETFs.
FUSS invests in U.S. equities across different sectors, including information technology (28%), healthcare (14%), consumer discretionary (12%), financials (11.8%), and telecommunication services (9%) – among others. The top holdings (as of March 23rd, 2022) are Apple Inc. (7.2%), Microsoft Corp. (6.2%), Amazon.com Inc. (3.9%), Alphabet Inc. Class A (2.5%), and Tesla (2.1%).
FUSS has a total expense ratio of 0.3% and trades on multiple European exchanges, including the London stock exchange (FUSS, GBP or FUSR, USD), the Deutsche Boerse Xetra (FUSR, EUR), the SIX Swiss Exchange (FUSR, USD or FUSRCHF, CHF), and the Borsa Italiana (FUSR, EUR).
Since its inception on May 21st, 2020, the fund has generated a cumulative return of +54%.
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