3 ETFs for a Small-Cap Revival
Why It Matters
The pick highlights how active ETFs are proliferating and offer targeted strategies—tax-exempt income, yield-enhanced equities, and international value—that investors can use to position portfolios for shifting market opportunities. These funds illustrate why active management and manager pedigree matter as investors seek differentiated sources of return and income within the booming ETF ecosystem.
Summary
Active ETFs have surged, reaching nearly $1.5 trillion in assets and $450 billion of net inflows in 2025, and Morningstar highlights three new active funds to watch: Vanguard Core Tax-Exempt Bond ETF (VCRM), T. Rowe Price Capital Appreciation Premium Income ETF (TCAL), and John Hancock Disciplined Value International Select ETF (JDVI). VCRM, run by veteran municipal managers Steven McAfee and Matthew Kiselak, uses Vanguard’s deep analyst and trading bench to identify mispriced munis and outpaced the Bloomberg Municipal Index marginally since its November 2024 inception, finishing in the top decile in 2025. TCAL brings David Giroux’s equity-picking team and a covered-call overlay to pursue income with a managed trade-off between yield and upside. JDVI, a silver-rated international value ETF with a December 2023 launch, rebounded from a weak 2024 to deliver strong 2025 results driven by European exposure and leverages a large analyst team and managers with long mutual-fund track records.
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