Recent years have been very kind to active ETFs. Actively managed ETFs have proliferated and been a key driver of overall ETF launches. ...

ETF Prime: International Stocks Lead Flows | ETF TrendsRoxanna Islam, head of sector and industry research at VettaFi, joined Nate Geraci on this week's ETF Prime to discuss record international equity flows. The category saw net inflows of over $220 billion in 2025 with momentum continuing into 2026 at roughly $75 billion year-to-date.The [iShares Core MSCI Emerging Markets ETF (IEMG)] ranks second on the ETF inflow leaderboard with about $10 billion year-to-date, according to Islam. The [Vanguard Total In ...

Core Insights - Fidelity's ETF market data for 2025 indicates a significant shift towards active ETFs, with approximately 36% of overall fund flows directed towards active strategies, and over 46% in the intermediary space [1] - The market has seen a broadening effect benefiting large value, international developed, and small- and mid-cap stocks despite volatility [1] - In fixed income, there is a notable movement towards ultra-short strategies, while advisors are leaning towards core passive and core-plus active funds [1] ETF Flow Trends - Active ETFs are gaining traction, particularly among advisors, with a noted increase in flows towards active strategies in small-cap segments, which saw a positive flow of $17 billion [1] - Passive strategies continue to dominate in low-cost, tax-efficient large-cap core beta, but there is a surprising shift towards active in foreign considerable growth [1] ETF Fees and Flows - A survey indicated that 43% of overall ETF flows are directed towards funds charging fees between 20 to 40 basis points, with 46% of advisor-driven flows also in this range [1] - ETFs charging 61 basis points or more received the second-largest share of flows, although this segment saw the lowest percentage of advisor-driven flows, indicating a reluctance towards higher fees [1] ETF Options - Fidelity offers a diverse range of ETFs, including both active and passive strategies, such as the Fidelity Enhanced International ETF (FENI) and the Fidelity Yield Enhanced Equity ETF (FYEE) [1]

Core Insights - Avantis Investors has launched a new global equities ETF named Avantis Total Equity Markets ETF (AVTM) on the New York Stock Exchange, which includes both U.S. and non-U.S. developed and emerging market equities [1] - The ETF aims to differentiate itself from passive, market-cap weighted index funds by providing better risk characteristics and targeting firms that offer higher-than-expected returns [1] - The fund will charge a net expense ratio of 22 basis points, and it is part of Avantis's suite of 45 strategies offered in both U.S. and international markets [1] Market Context - The launch of AVTM comes at a time when investors are increasingly seeking equities exposure outside the U.S., while still wanting access to U.S. equities [1] - Avantis's Chief Investment Strategist emphasized the importance of fulfilling client needs, which has contributed to the firm's strong growth and adoption in recent years [1] Management Team - The global equities ETF will be managed by a team that includes Chief Investment Officer Eduardo Repetto and senior portfolio managers Mitchell Firestein, Daniel Ong, Ted Randall, along with portfolio manager Matthew Dubin [1]

Core Insights - Options-based ETFs gained significant popularity in 2025, with derivative income ETFs attracting $54 billion, increasing their total asset base to $127 billion [1] - Defined outcome strategies managed assets worth $76 billion, indicating a strong market presence and investor interest in these financial products [1] Group 1 - The rise of options-based ETFs reflects a growing trend in the investment landscape, showcasing investor appetite for derivative income strategies [1] - The substantial inflow of $54 billion into derivative income ETFs highlights the effectiveness of these products in attracting capital [1] - The total asset base of $127 billion for derivative income ETFs signifies a robust growth trajectory within this segment [1] Group 2 - Defined outcome strategies, with $76 billion in assets under management, demonstrate a solid foothold in the market [1] - The performance of defined outcome strategies suggests they are appealing to investors seeking specific risk-return profiles [1]

Core Insights - The active corporate bond ETF KORP has gained a five-star rating from Morningstar, highlighting its strong performance in the market [1] - KORP has seen its assets under management (AUM) triple since 2020, indicating significant growth and popularity among investors [1] - The fund focuses on intermediate-term investment-grade corporate bonds while also allocating some assets to junk bonds, achieving a yield to maturity of 5.8% and a 30-day SEC unsubsidized yield of 4.9% as of December 31 [1] Performance Metrics - KORP has delivered an 8.5% return over the past year, outperforming its ETF Database Category average [1] - The fund charges a fee of 29 basis points for its services, which is competitive in the active ETF space [1] Strategic Advantages - The active management strategy allows KORP to closely analyze issuer fundamentals and sector data, providing an edge over passive bond funds that replicate indexes [1] - Active funds like KORP can adjust their holdings in response to early calls or defaults, enhancing their resilience in uncertain market conditions [1]

Core Viewpoint - The T. Rowe Price Tech ETF (TTEQ) offers a flexible investment vehicle that allows for a broader definition of tech stocks, enabling better access to earnings results across various sectors [1] Group 1: ETF Characteristics - TTEQ charges a fee of 63 basis points and includes key tech names like Alphabet (GOOGL) and Meta (META), which are categorized under communications [1] - The fund is managed by Dom Rizzo, who employs a strategy that blends innovative tech companies with critical tech infrastructure firms [1] - TTEQ has the flexibility to invest in both large-cap tech firms and newly public companies, enhancing its investment scope [1] Group 2: Performance and Strategy - Over the past year, TTEQ has achieved a return of 20.8%, outperforming its ETF Database Category average [1] - The fund's investment strategy is based on fundamental research, stock valuation, and share price growth potential [1] - TTEQ recently completed a private investment in OpenAI, indicating its commitment to innovative tech investments [1] Group 3: Future Outlook - TTEQ is positioned not only for immediate earnings results but also as a long-term investment option for those interested in tech across various sectors [1]

Core Insights - T. Rowe Price Investment Management's active ETF asset base has nearly doubled in the past year, indicating a shift towards funds focused on stock and bond selection rather than passive index tracking [1][4]. Group 1: Market Trends - The ETF market is experiencing a division between "sharp objects," which are risky single-stock and leveraged products, and strategic active funds managed by experienced portfolio managers [2]. - Active ETFs now account for approximately 11% to 12% of total ETF assets, a significant increase from lower levels three to five years ago, with projections suggesting growth to the "higher teens" percentage within five years [4]. Group 2: Fund Performance - The T. Rowe Price Capital Appreciation Equity ETF (TCAF), launched in June 2023, has grown to over $6.3 billion in assets by employing fundamental research to construct a portfolio of around 100 companies [5]. - TCAF focuses on capital allocation quality and long-term potential, contrasting with the volatility associated with leveraged products [5]. Group 3: Investment Strategies - Advisors utilize active ETFs in various ways, with some employing options-based strategies for income, while strategic stock-picking funds like TCAF aim to outperform through security selection rather than leverage [6].

Core Insights - Small-cap ETFs are experiencing renewed investor interest after a period of outflows, indicating potential investment opportunities ahead [1][2] - The shift in investor sentiment is attributed to favorable monetary and fiscal conditions for smaller companies, with historical data showing small-caps outperform large-caps by 6% in the year following Federal Reserve rate cuts [3] - Valuation metrics indicate that small-caps are trading at a 12% discount to their pre-pandemic five-year average and are 36% below large-caps on a relative basis, suggesting a buying opportunity [4] Investment Themes - Active ETFs have seen significant growth, collecting a record $580 billion in 2025, while active mutual funds faced $640 billion in outflows [5] - Over the past decade, active ETFs have gained $1.2 trillion in assets, contrasting with active mutual funds that lost nearly $4 trillion [5] - In 2025, 47% of active fixed income managers outperformed their benchmarks, compared to only 32% of active equity managers, highlighting the stronger performance of fixed income [6] Diversification Trends - The case for diversification has strengthened, as multiple asset classes delivered positive returns in 2025, marking the first time since 2019 that stocks, bonds, and commodities all outperformed cash [7] - A notable 76% of countries in the MSCI ACWI index outperformed the U.S., the highest percentage since 2009, indicating a shift in global investment dynamics [7] - The SPDR Bridgewater All Weather ETF (ALLW) is highlighted as a diversification option, with significant trading volume exceeding $10 million in 12 of the last 13 days [8]

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]