ETF Stream

Investment Insights: Where Active ETFs Gain Traction

The active ETF market saw a surge of launches and asset gathering last year, but UBS cautions the ETF is merely a wrapper—not a cure-all—and success depends on strong active investment IP. Firms with proven track records and corporate access can broaden distribution through ETFs, especially in areas where indexing is weak or benchmarks are meaningless, such as CLO exposures, certain thematic equities and parts of fixed income. Emerging market equities and select enhanced equity strategies also present opportunities where active managers can add value. Investors and fund selectors are increasingly demanding three-year live track records before committing assets to active ETFs.