Active ETFs Are Evolving: Here’s How

Core Insights - The proliferation of ETFs since the introduction of the ETF rule in 2019 has led to significant growth in active ETFs, which combine the benefits of active management with the flexibility of ETFs [1] - Active ETFs, such as those offered by American Century Investments, have evolved to provide lower costs and diversification while maintaining active management strategies [2] Active ETF Growth - The Avantis U.S. Small Cap Value ETF (AVUV) exemplifies the successful integration of active management and ETF structure, achieving over $5.5 billion in assets under management (AUM) in the past year, bringing total AUM to over $20 billion [3] - The strategy of AVUV has yielded a return of 12.1% over the last three months, showcasing the effectiveness of its systematic investment approach [3] New Product Launches - American Century Investments has launched two new active ETFs, the American Century Small Cap Value Insights ETF (ACSV) and the American Century Small Cap Growth Insights ETF (ACSG), which focus on small-cap firms through fundamental research [4][5] - Both ACSV and ACSG charge a fee of 49 basis points and aim to construct portfolios based on value and growth perspectives, respectively [5] Investment Strategy - The combination of ACSV and ACSG allows for a deep active investing focus while leveraging the tradability of ETFs, enhancing overall portfolio strategies [6] - Active ETFs are designed to cater to various risk tolerances and investment goals, with AVUV, ACSV, and ACSG representing a few examples of the category's growth [6]