Nearly all exchange-traded fund issuers are developing or planning to develop a transparent active ETF product according to Cerulli Associates, the fund data provider.Cerulli said in a report that 91% of ETF issuers are developing or planning to develop a transparent active ETF product, versus 26% for passive ETFs. The report said: “Fee compression in passive ETFs and greater acceptance of active ETF product has made active ETFs the predominant focus.”Source: CerulliETF assets under management exceeded $10 trillion for the first time in November 2024 according to Cerulli.“The vehicle crushed its previous monthly flow record, totaling $156bn,” said Cerulli. “As of the end of November, active ETFs nearly doubled their total net inflows posted in 2023.”This increased in December 2024 when Oakmark and MFS Investment Management both entered the active ETF market. Asset management research provider Morningstar said MFS, which launched the US’ first mutual fund more than 100 years ago, introduced its first series of actively managed ETFs with three equity and two fixed-income active funds. Michael Roberge, MFS Michael Roberge, then chief executive and chair of MFS, said in a statement that the ETFs allow investors to access MFS’ investment capabilities across five popular investment categories. He said: “As investors’ needs become more diverse and complex, we are pleased to be able to offer this next level of vehicle choice.”The funds also marked Harris Associates’ first foray into ETFs and the first ETF it listed under the Oakmark brand according to Morningstar.Cerulli also expects ETFs to be used to provide access to a broader range of alternative investment exposures, including private capital. In 2019 commodities and real estate ETFs made up two thirds, 65%, of what Cerulli defines as alternative category ETFs. By the second quarter of 2024 that had decreased to about 37%, due to the increase in ETFs providing derivative income, defined outcome, and cryptocurrency exposures according to The Cerulli Report—U.S. Exchange-Traded Fund Markets 2024.Alternative ETF assets crossed $400bn in net assets in November 2024 and had asset growth rate of 93% in the first 11 months of the year, highest among all asset classes, according to Cerulli.“Rapidly, the alternative investment offerings in the ETF structure have shifted from simple passive holdings to more active strategies that provide advisors with specific outcomes such as greater income and predefined return profiles,” added Cerulli.However, there are challenges. About half of advisors do not use alternative investments exposures due to concerns about liquidity, heightened fees, product complexity, and burdensome subscription/redemption processes according to Cerulli.Daniil Shapiro, director of Cerulli, said in the report: “While not a perfect replacement to illiquid private capital exposures, an ETF could be exactly the thing for a cohort of financial advisors looking
Dom. Gen 5th, 2025
