Core Insights - MFS has launched two new actively managed ETFs: MFS Blended Research Core Equity ETF (BRCE) and MFS Blended Research International Equity ETF (BRIE) [1][2] - The new ETFs aim to provide clients with more choices in active, fully transparent investment options, leveraging MFS' 25 years of experience in Blended Research strategies [2][7] MFS Blended Research Core Equity ETF (BRCE) - BRCE has an expense ratio of 24 basis points and focuses on generating capital appreciation through an active core equity strategy [3] - The launch of BRCE is timely, given the current macroeconomic uncertainty, as many investors seek actively managed ETFs to navigate the U.S. equity market [4] MFS Blended Research International Equity ETF (BRIE) - BRIE targets international markets with a net expense ratio of 34 basis points, also aiming for capital appreciation [5] - The fund's strategy includes a bottom-up approach that combines quantitative research with fundamental analysis, aiming to outperform the MSCI All Country World (ex-US) Index [5][6] Investment Strategy and Differentiation - Both ETFs are characterized by MFS' proprietary blend of quantitative and fundamental signals, which is expected to provide differentiated return potential for investors [7] - MFS emphasizes the unique and transparent integration of independent research perspectives as a competitive edge for these ETFs [7]

Core Insights - Active ETFs are gaining traction, with TTEQ representing a shift from passive to active management in sector investing, particularly in technology [1][2] - TTEQ's recent investment in OpenAI exemplifies its active management strategy, aiming to capture performance within the tech sector [2][4] - The flexibility of active management allows TTEQ to navigate across sectors and geographies, providing a competitive edge over passive funds [3][6] TTEQ Overview - TTEQ, managed by Dominic Rizzo, launched over a year ago and focuses on technology investments, including private companies [1][2] - The fund has achieved a year-to-date return of 26.9% and 27.3% over the past year, outperforming the Invesco QQQ Trust [7] - TTEQ charges a fee of 63 basis points for its active investment strategy, primarily targeting large-cap growth tech firms [7] Investment Strategy - TTEQ's approach includes the ability to invest in private companies, which is a unique advantage over passive ETFs [2][3] - The fund is currently in an "AI-on" mode, focusing on companies benefiting from the AI revolution, but may shift to a more defensive stance in the future [7] - Rizzo emphasizes that TTEQ is not solely an AI ETF but a broader technology ETF that adapts to market conditions [7] OpenAI Investment - The investment in OpenAI aligns with TTEQ's strategy of identifying potential aggregators in the tech space, leveraging the concept of "Aggregation Theory" [4][5] - OpenAI's extensive user base and diverse revenue streams position it as a significant player in the tech sector, with potential for rapid growth [6][5] - The fund's ability to access deal flow through private investments enhances its capacity to capitalize on emerging trends in technology [3][2]

Core Insights - Vanguard is expanding its active ETF offerings with the launch of three new equity funds, increasing its active equity lineup to eight funds, reflecting a strategic shift to meet current market demands for active management [1][4][8] Active Equity ETFs - The new funds include the Vanguard Wellington U.S. Value Active ETF (VUSV), Vanguard Wellington U.S. Growth Active ETF (VUSG), and Vanguard Wellington Dividend Growth Active ETF (VDIG), all advised by Wellington Management [1][4] - VUSV focuses on value investing with an expense ratio of 0.30%, VUSG targets growth with an expense ratio of 0.35%, and VDIG emphasizes dividend growth with an expense ratio of 0.40% [11] Active Fixed Income ETFs - Vanguard is also enhancing its active fixed income offerings, launching four new funds this year, bringing the total to nine active fixed income funds [3] Management Expertise - The new active funds leverage Vanguard's 50 years of active management experience and the long-standing partnership with Wellington Management, which has been in place since 1928 [5][6] Investment Strategy - The active management strategy allows portfolio managers to adjust holdings based on market conditions, aiming to optimize returns while managing risks [5][7] - The new funds are designed to work together, providing investors with a diversified portfolio through a mix of different investment styles [8]

Core Viewpoint - Stocks are currently expensive, but this valuation may be justified due to significant capital expenditure in AI, which continues to drive market growth despite a slowing macro economy [1] Group 1: Market Dynamics - AI spending has been a key driver for robust market growth, particularly benefiting major AI hyperscalers like Amazon Web Services (AWS) and Apple (AAPL) [1] - The U.S. stock market fundamentals can remain strong even with modest overall economic growth, as hyperscalers can manage higher borrowing costs due to substantial cash flows [1] Group 2: Investment Metrics - Fundamental metrics such as the S&P 500's forward earnings estimates and return on equity support the investability of the equity landscape [2] - An active ETF, like the T. Rowe Price Equity Research ETF (TSPA), emphasizes fundamental factors in its portfolio construction and has outperformed the S&P 500 over the last three years [3] Group 3: Investment Strategy - Investors may find uncertainty in the stock market, but an active approach that offers flexibility and fundamental research could be a prudent option for navigating high valuations [3]

Core Insights - The fourth quarter of 2025 is characterized by high uncertainty in both equities and bond markets, with options-based ETFs being presented as a potential solution for investors [1] - The primary goal of using options-based ETFs is to manage risk and portfolio volatility, as highlighted in a webinar featuring Fidelity Investments strategists [2][4] Options-Based ETF Strategies - Options-based strategies can help clients navigate various market scenarios, providing downside protection, volatility reduction, and potential income in changing interest rate environments [3] - Education on options-based ETFs is crucial, as many investors are unsure about their usage and mechanics, with 37% of webinar attendees expressing uncertainty [8][4] Active ETF Advantages - Active ETFs offer benefits such as transparency, cost-effectiveness, tax efficiency, and flexibility, contributing to their growing market share [5][6] - As of August 2025, active ETFs have seen inflows of $290 billion, with $43 billion coming from Nontraditional Equity funds, indicating a rising interest in options-based strategies [6] Yield and Market Conditions - The current market conditions, including the correlation between stocks and bonds and higher volatility, make derivative income strategies appealing, with an average 12-month yield of 7.99% [7] Fidelity's Options-Based Funds - Fidelity offers three options-based funds tailored to different market conditions: Hedged Equity ETF for downside protection, Dynamic Buffered ETF for choppy markets, and Yield Enhanced Equity ETF for enhanced income [11][16] - The Hedged Equity ETF is designed for moderate to sharp down markets, while the Dynamic Buffered ETF is suited for sideways markets, and the Yield Enhanced ETF aims to provide income with some downside protection [11] Expense Ratio and Promotions - Fidelity's Yield Enhanced Equity ETF is currently offering a limited-time 0% expense ratio, which typically stands at 28 basis points, as part of a promotional effort following the recent rate cut by the U.S. Federal Reserve [13][14]

Core Viewpoint - Federated Hermes has launched an active ETF aimed at providing income through equity holdings and call spread writing [1] Group 1 - The new product is named Federated Hermes Enhanced Income ETF (PAYR) [1] - The ETF is designed to deliver distributions from underlying equity holdings [1] - The ETF also generates income from net premiums received from call spread writing [1]

Core Insights - Active ETFs are gaining significance among investors, with flows expected to reach another record due to increasing launches [1] - The T. Rowe Price Health Care ETF (TMED) has shown strong performance, returning 11.8% over the last three months and 10% over the last month, outperforming its category averages [1] - TMED's active management and fundamental research focus are key drivers of its solid returns, investing in a diverse range of healthcare stocks globally [1] Performance Metrics - TMED charges a fee of 44 basis points and has outperformed the ETF Database Category average of 8% and 6.3% over three and one-month periods, respectively [1] - The FactSet Segment averages were 7.6% and 5.3% for the same periods, indicating TMED's superior performance [1] - As of October 6, TMED's price was $27.97, above its 50-day simple moving average of $25.37, signaling a buy opportunity [1] Investment Strategy - TMED employs a bottom-up investment approach, holding a portfolio of 100–150 stocks across biotechnology, pharmaceuticals, products and device providers, and healthcare service companies [1] - The ETF's active strategy may benefit from falling interest rates and ongoing AI innovations, which could enhance productivity and innovation in the healthcare sector [1]

Core Insights - The rise of active ETFs is transforming the investment landscape, providing flexible strategies that can outperform passive counterparts [1] - Active investing may enhance bond fund performance, particularly as interest rates fluctuate, suggesting a shift from passive to active bond allocations [1] Active vs Passive ETFs - Passive ETFs typically track indices closely, which can lead to challenges in accurately replicating bond holdings due to early calls or defaults [2] - Active bond ETFs, like the ALPS Smith Core Plus Bond ETF (SMTH), employ a bottom-up approach to seek high current income across various asset types, including corporate and government bonds [2] Performance Metrics - The SMTH ETF has achieved a year-to-date return of 5.7%, surpassing both its category average of 5.2% and the Factset Segment average of 4.2% [3] - Over the past five years, SMTH has outperformed the iShares Core U.S. Aggregate Bond ETF (AGG), indicating its effective management and strategy [3] Investment Strategy - SMTH's strategy includes active investments in a diverse range of debt securities, considering factors such as yield, credit ratings, and liquidity [2][3] - The fund is positioned as a strong option for investors seeking active management in fixed income allocations, particularly in response to market shifts [3]

ETF Market Trends & Flows - Gold ETFs are experiencing significant inflows, hitting record highs and surpassing S&P 500 ETFs in popularity, indicating a potentially bearish market sentiment [1][2] - Equity buying is prevalent, with interest in S&P 500, bonds, and internet ETFs, suggesting a mixed approach of seeking both growth and hedging [3] - Small-cap ETFs are seeing mixed interest, with initial buying followed by quick exits, while fundamentally or factor-weighted approaches are gaining traction [3][11] - Bitcoin ETFs are competing with gold as a store of value, with cumulative flows showing a dynamic race between the two asset classes [4] - Zero-fee funds are attracting the bulk of ETF inflows, with over $300 billion flowing into products costing 10 basis points or less [22] Active vs Passive ETF - Active ETFs are gaining traction, representing close to one-third of overall flows, with firms like Baron entering the space [2][15] - Fees may be less important for active ETFs, as investors prioritize performance and are willing to pay for active management and security selection [16][18] - Vanguard's active mutual funds have outperformed the SPY (S&P 500 ETF) at a higher rate than some peers, attributed to lower fees and less turnover [24][25] - The approval of semi-transparent or non-transparent ETFs was symbolically important but did not necessarily translate into assets [42] Vanguard's Strategy & Position - Vanguard is a leader in low-cost products and is expected to push active ETFs significantly, leveraging its substantial assets under management (approximately $14 trillion to $15 trillion) [20][29] - Vanguard may eventually allow a Bitcoin ETF to capture trends among younger investors [30] - Vanguard's outperformance in active management is linked to lower fees, which allows managers to take less risk and still deliver competitive returns [26][27] Megatrend ETF & Thematic Investing - Lazard Asset Management launched a Megatrends ETF (TMHZ) to capitalize on long-term trends like AI, health, consumer behavior, and data, with a 50 basis points fee [32][35] - Thematic ETFs can fit into model portfolios as tactical themes, and active management may improve client performance in this space compared to passive approaches [38][39] - The goal of megatrend investing is to access long-term themes that will play out over decades, differentiating it from individual themes with shorter lifecycles [40]

Core Insights - GQG Partners has launched its first ETF, the GQG US Equity ETF, utilizing SEI's Advisors' Inner Circle Fund series trust as its operational platform, marking a significant expansion of their nine-year partnership [1][2][3] - The ETF launched on July 14, 2025, with over $200 million in assets under management, facilitated by a strategic private fund conversion under Section 351, which allows for a tax-efficient transition to an ETF structure [2][3] - The active ETF market in the U.S. is projected to grow from $856 billion in 2024 to $11 trillion by 2035, indicating a strong demand for active ETF products [3][6] Company Overview - SEI is a leading global provider of financial technology, operations, and asset management services, managing approximately $1.7 trillion in assets as of June 30, 2025 [7] - SEI's Advisors' Inner Circle Fund provides a scalable infrastructure for investment managers, supporting the launch of various investment vehicles, including mutual funds and ETFs [4][5] - GQG Partners manages $172.4 billion in client assets as of June 30, 2025, focusing on long-only equity strategies for institutions, advisors, and individuals [9]