Actively managed ETFs were spawned from the battle of ETFs vs. mutual funds. Investors liked the simplicity and advantages of ETFs but also liked the active maintenance and trading that mutual funds offer. The hybrid was actively managed ETFs.
Most ETFs are index funds, but some ETFs do have active management. Actively managed ETFs have only been offered in the U.S. since 2008. The first active ETF was Bear Stearns Current Yield ETF. Currently, actively managed ETFs are fully transparent, publishing their current securities portfolios on their websites.
While a relatively new ETF innovation, it's not an unpopular one. This list of actively managed ETFs will grow as more and more investors reap the benefits of these funds in their ETF trading strategies.
AADR - WCM/BNY Mellon Focused Growth ADR ETF
An actively managed ADR (American Depository Receipts) ETF that consists of 20 to 30 holdings that focus on sectors in both developed and emerging market foreign regions.
ACCU - AdvisorShares Accuvest Global Opportunities ETF
This fund tracks indexes such as the MSCI All Country World Index and consists of other country-specific ETFs.
ALT - iShares Diversified Alternatives Trust ETF
This iShares ETF is made up of commodity, bond, currency and interest rate futures because it wants to expose discrepancies in the pricing of financial instruments. The fund intends to profit from the deviations of current asset prices and their historical norms.
ELD - WisdomTree Emerging Markets Local Debt Fund
This is an emerging market ETF that is designed to provide exposure to emerging market debt denominated in local currencies.
EMLP - First Trust North American Energy Infrastructure ETF
A Master Limited Partnership (MLP) fund from First Trust that consists of about 65% energy companies and 35% utility companies.
FWDB - Madrona Forward Global Bond ETF
This is an AdvisorShares forward-looking strategy international bond fund that is managed by Madrona.
FWDD - Madrona Forward Domestic ETF
This is an AdvisorShares forward-looking U.S. ETF fund that is managed by Madrona.
FWDI - Madrona Forward International ETF
This is an AdvisorShares forward-looking strategy international fund that is managed by Madrona.
FTSL - First Trust Senior Loan Fund
This is an actively managed ETF with a primary objective of providing high current income by investing primarily in a diversified portfolio of first lien senior floating-rate bank loans.
GAL - SPDR SSgA Global Allocation ETF
This seeks to provide capital allocation and it tracks two indexes. The primary benchmark is the MSCI ACWI IMI Index and the second benchmark is the SSgA Global Allocation Composite Index.
GIY - Guggenheim Enhanced Core Bond ETF
Guggenheim / Claymore bond ETF is focused on outperforming the BarCap Index.
GIVE - AdvisorShares Global Echo ETF
This fund seeks to achieve long-term capital appreciation with an emphasis on absolute (positive) returns and low sensitivity to traditional financial market indices, such as the S&P 500 Index, over a full market cycle.
GLCB - The WisdomTree Global Corporate Bond Fund
This actively managed fund seeks to track the performance of select issuers in the U.S. investment-grade corporate bond market that are deemed to exhibit favorable fundamentals and opportunities for income.
GMMB - Grail McDonnell Intermediate Municipal Bond ETF
This municipal bond ETF is actively managed on a daily basis as opposed to others which are not maintained as frequently.
GMTB - Grail McDonnell Core Taxable Bond ETF
This is another bond ETF from Grail McDonnell that is actively managed on a daily basis as opposed to other less frequently managed funds.
GSY - Guggenheim Enhanced Ultra-Short Bond ETF
Another Guggenheim / Claymore short-term bond index that is trying to outperform the short-term U.S. Treasury's Index.
GTAA - Cambria Global Tactical ETF
A global tactical actively-managed ETF that gives investors access to multiple financial assets like foreign currencies, bonds, real estate, commodities, and other equities.
GVT - Grail American Beacon Large Value ETF
This is an actively managed style ETF that focuses on large-cap value assets such as common stocks, preferred stocks, convertibles, and ADRs.
HECO - Huntington EcoLogical Strategy ETF
This focuses on companies that strive to offer products and services that are "green" and strives to modify their internals to be Eco-friendly.
HYLD - AdvisorShares Peritus High Yield ETF
An actively managed junk bond ETF that seeks a high-income stream and capital appreciation. Peritus manages the ETF and avoids new debt issues while taking a value-based active credit approach.
IESM - iShares Enhanced US Small Cap ETF
This is an exchange-traded fund is incorporated in the U.S. The iShares Enhanced US Small-Cap ETF seeks long-term capital appreciation.
ILB - Global Advantage Inflation-Linked Bond Strategy ETF
This actively managed fund selects fixed income securities whose principal payments or interest payments are adjusted according to official measures of inflation.
INKM - SPDR SSgA Income Allocation ETF
This seeks to provide total return by focusing on investments in income and yield-generating assets. The primary benchmark is the MSCI World Index and the second benchmark is the SSgA Income Allocation Composite Index
MATH - AdvisorShares Tactical ETF
An actively managed ETF from AdvisorShares that is actually an ETF of ETFs. At all times it can consist of commodity ETFs, equity ETFs, and currency ETFs. And even ETNs.
PHDG - Invesco S&P 500 Downside Hedged Portfolio
This fund tracks the S&P 500 Dynamic VEQTOR Index and seeks to achieve positive total returns in rising or falling markets that are not directly correlated to broad equity or fixed-income market returns.
QEH - QAM Equity Hedge ETF
QEH seeks investment results that exceed the risk-adjusted performance of approximately 50% of the long/short equity hedge fund universe as defined by the HFRI Equity Hedge Total Index constituents. This is done in an effort to produce higher returns with lower risk than the S&P 500 Index, over time.
RLY - SPDR SSgA Multi-Asset Real Return ETF
This fund looks to achieve a real return that consists of capital appreciation and current income. It tracks a primary and secondary benchmark, the Barclays U.S. Government Inflation-linked Bond Index and the SSgA Multi-Asset Real Return Composite Index.
RRF - WisdomTree Global Real Return Fund
An actively managed ETF from WisdomTree with the goal of giving investors protection against inflation.
SMMU - Pimco Short Term Municipal Bond Strategy Fund
This actively managed bond ETF tracks the Barclays Capital 1-3 Year Municipal Bond Index. Fund managers reserve the right to determine which assets should be in the fund on a daily basis.
VEGA - STAR Global Buy-Write ETF
VEGA employs a Buy-Write overlay for its global allocation strategy that uses Exchange Traded Products (ETPs).
WDTI - WisdomTree Managed Futures Strategy Fund
WDTI adopts a strategy that attempts to track the Diversified Trends Indicator, a long-short rules-based managed futures strategy index.
Frequently Asked Questions (FAQs)
What is the primary difference between index funds and actively managed funds?
The primary difference between index funds and actively managed funds is that index fund managers do not make decisions. Passive index funds aim to perfectly match the underlying index, so managers just have to buy and sell holdings according to that index. Active managers don't have an index to reference, so they need to make all of the investment decisions themselves.
How do actively managed ETFs work?
From an investor's standpoint, actively managed ETFs work just the same as any other ETF. Investors simply have to place a buy order to open a position, and then they can hold the ETF as long as they want. While they hold the position, ETF managers may distribute dividends, but not all ETFs will do so.