Core Insights - Active ETFs are gaining popularity among investors due to lower fee structures, which enhance the likelihood of fund managers outperforming passive benchmarks [1][2] - The average active ETF charges 0.63% in expense ratios, significantly lower than the 1.02% average for mutual funds, which is crucial for active managers aiming to achieve market returns minus fees [2] Fee Comparison - Active ETFs have an equal-weighted average expense ratio of 0.63%, while mutual funds average 1.02% [2] - When weighted by assets, active ETFs charge 0.40% compared to 0.58% for mutual funds, indicating a clear cost advantage for active ETFs [2] Performance Metrics - Only 21% of U.S. active funds managed to survive and outperform their average passive peers over the decade ending June 2025 [2] - The T. Rowe Price International Equity ETF (TOUS) exemplifies the cost advantage, with a 0.50% expense ratio and $815.4 million in flows year-to-date [3] Market Trends - Over 1,300 active ETFs have been launched since the beginning of 2024, reflecting a growing trend in the market [4] - Active ETFs provide greater tax efficiency through in-kind creations and redemptions, helping to avoid capital gains distributions that often affect mutual funds [4] Structural Advantages - Active ETFs benefit from lower trading costs and reduced impact from buying and selling by other investors, positioning them for better success rates against passive benchmarks compared to mutual funds [5]

That didn’t take too long. Several major asset managers are crossing asset milestones in their ETF businesses amid a record year for inflows industrywide. Capital Group’s three-year-old line of ETFs just hit a total of $100 billion in assets under management. Of course, no one comes close to BlackRock’s iShares or Vanguard, which at $3.9 trillion and $3.7 trillion are the dominant players in the market. But the rising profile of Capital Group, and other semi-recent entrants like T. Rowe Price, highlights ...

Core Insights - The ETF market is becoming increasingly competitive, making it difficult for issuers to find distribution space for new funds, especially for actively managed ETFs and those with innovative strategies [2][3] - A survey by Cerulli Associates revealed that 71% of asset managers find it challenging to secure shelf space for active ETFs on broker/dealer platforms, with 96% citing home approval on models/lists as a moderate challenge for ETF distribution [2][4] Distribution Channels - ETF issuers prefer wirehouses as the primary channel for growth, with 38% of respondents ranking them as their top choice, while 29% prefer independent and hybrid RIAs [4] - Independent broker/dealers and ETF model providers are seen as growth opportunities by only 13% of respondents each [4] Challenges in Placement - Limited shelf space and the short track record of new ETFs are significant barriers for asset managers in placing their products on broker/dealer platforms [5] - Broker/dealers typically require a minimum asset threshold of approximately $50 million to $100 million in AUM for ETF listings, which not all issuers achieve within the first year [6] Regulatory Considerations - Broker/dealers must adhere to the SEC's Regulation Best Interest rule, which complicates the approval of ETFs with less reliable track records, such as leveraged ETFs or those investing in emerging asset classes like cryptocurrency [7] - Active managers face additional challenges as broker/dealer firms often require a performance track record before approving funds for their platforms [7]

Core Insights - The U.S. Federal Reserve has implemented its first rate cut of 2025, leading to speculation about the pace of future cuts in the capital markets [1] Group 1 - Fixed income investors are particularly focused on the implications of the recent rate cut and potential future cuts [1]

A new post by the president regarding tariffs has once again impacted markets. 2025 as a whole has been repeatedly beset by tariff news often out of the blue, negatively affecting portfolios. For many investors, that has created numerous opportunities. But for as many others, it has created headwinds. Adapting to repeated policy shifts could take a toll on portfolios and investors, but active ETFs can help. See more: Invest in Inflation-Sensitive Stocks in Active ETF TURF For more news, information, and ana ...

Investors seeking international exposure may want to target companies using a discerning strategy as opposed to simply tracking an all-encompassing index. They can achieve this with the flexibility of... ...

The active ETF story has been one of the most exciting market narratives in recent years, with actively managed funds proliferating and delivering for their investors at a high level. As more and more... ...

Financial Data and Key Metrics Changes - The company reported a net inflow of $1.5 billion in April, with trends improving in May, despite a challenging environment for U.S. markets [5][7][9] - Operating income grew by 18% year-over-year in the first quarter, with a four percentage point expansion in margins [44] Business Line Data and Key Metrics Changes - Fixed income mandates continue to perform well, particularly in Europe, contributing to the positive net flows [6][9] - Active equity remains a significant revenue source, accounting for over 35% of total revenues, but faces challenges in outperforming benchmarks [25][26] Market Data and Key Metrics Changes - The company has approximately $275 billion in client assets in Asia, with Japan showing significant growth, managing $80 billion, double the amount from four years ago [12][13] - The EMEA region reported $14 billion in flows in the first quarter, with a mix of fixed income and ETFs driving performance [42] Company Strategy and Development Direction - The company aims to simplify and streamline its business while focusing on core activities and markets, particularly in Asia and India [20][21] - The strategic focus includes enhancing the active equity segment and expanding the ETF business, which has shown strong growth [45][49] Management's Comments on Operating Environment and Future Outlook - Management noted that cash on the sidelines remains high, with 20-25% of private wealth clients holding cash, indicating potential for future investment [4][78] - The company is optimistic about the growth potential in Asia, particularly in China, driven by demographic changes and government reforms [12][16] Other Important Information - The company has adopted a hybrid approach for its Alpha platform, which is expected to reduce implementation time and maintain cost efficiencies [87][88] - The partnership with Barings is aimed at expanding alternative credit strategies, leveraging both firms' strengths [55][60] Q&A Session Summary Question: What are the key drivers of your outperforming inflows compared to other players? - The company attributes its success to strong relationships and a long-standing presence in European and Asian markets, which have led to positive inflows despite challenges in the U.S. [8][9] Question: How is the active equity segment performing amid market volatility? - Active equity is crucial for the company, but it faces challenges as managers need to perform in the top quartile to attract and retain clients [25][26] Question: What is the outlook for the ETF business? - The ETF business is expected to continue growing, with the potential for active ETFs to reclaim some market share from passive investments [49][50] Question: How does the company plan to manage expenses moving forward? - The company has successfully reduced expenses while investing in growth areas, and it aims to continue finding operational efficiencies [91][92] Question: What are the capital allocation priorities? - The company plans to focus on investing back into the business, maintaining a payout ratio between 40-60%, and is open to share buybacks as opportunities arise [106][110]