Yahoo Finance 5 Active ETFs Loved by Investors in 1H
The investing world has been witnessing tectonic shifts for the past few years with changing global economic fundamentals. Investors’ sentiment is now not the same as it was just after the financial meltdown in 2008, at the time of the Eurozone debt crisis, and during the peak of the COVID-19 crisis.
Earlier, the investing domain used to be dominated by passively managed or index-tracking funds. Their low cost and transparent structure have made them highly coveted. However, the changing investing backdrop has forced ETF issuers to become more agile.
Agreed, active funds are arguably expensive, as these involve research expenses associated with the manager’s due diligence and additional costs in the form of a wide bid/ask spread beyond the expense ratio. However, issuers are still turning more innovative and intend to come up with products that are more dynamic and suit the current improving but volatile market conditions.
Inside the Growth of Active ETFs
Portfolio managers have poured money into the active sector for 50 successive months, after a $22 billion allocation in May, per Bloomberg. Per State Street Corp., the third-largest ETF manager, actively-managed ETFs appear all set to amass a record-breaking $260 billion this year, almost double than last year’s $140 billion.
At the current level, active ETFs have carved a significant niche within the U.S. market, boasting total assets of $684.5 billion across 1,479 products. The average expense ratio is 0.71%. Active ETFs have experienced significant growth in recent years, consistently attracting a minimum of $25 billion in assets annually since 2018, with an impressive organic growth rate exceeding 30% each year, per Morningstar.
While active funds have hauled in about $107 billion this year until early June, or 32% of all ETF flows, they still make up a small share of 7% of the roughly $9 trillion in total ETF assets, Bloomberg data revealed. But the future looks bright. Morningstar Direct expects the total number of actively-managed ETF offerings to top passive ones in the next three to five years, as quoted on Bloomberg.
Notable Players in the Active ETF Industry
Firms such as Dimensional Fund Advisors — the largest active ETF issuer — and JPMorgan Asset Management are commanding the market growth, making up about 40% of total active ETF assets. While Dimensional Fund Advisors is famous for its systematic funds, JPMorgan has managed to rake in billion-dollar cash with ETFs that deploy options overlay strategies to generate higher yield, per Bloomberg.
ETFs in Focus
Against this backdrop, below we highlight a few active ETFs that garnered immense assets in the first half of 2024.
JPMorgan Nasdaq Equity Premium Income ETF JEPQ – $5.19 billion of year-to-date inflows
The fund looks to deliver monthly distributable income and Nasdaq 100 exposure with less volatility. The fund has a huge asset base of $14.69 billion. Microsoft (7.49%), Apple (5.77%) and NVIDIA (5.43%) are the top three holdings of the fund. The fund charges 35 bps in fees and yields 8.83% annually.
JPMorgan Equity Premium Income ETF JEPI – $2.17 billion of year-to-date inflows
The fund’s defensive equity portfolio uses a time-tested, bottom-up fundamental research process for the stock selection. The fund has a huge asset base of $33.82 billion. No stock accounts for more than 1.76% of the fund. The fund charges 35 bps in fees and yields 7.31% annually.
GraniteShares 2x Long NVDA Daily ETF NVDL – $2.29 billion of year-to-date inflows
The $4.81 billion ETF looks to track two times the daily percentage change of the common stock of NVIDIA Corp. The expense ratio of the fund is 1.15%. The fund yields 5.14% annually.
JPMorgan Active Growth ETF JGRO – $856.7 million of year-to-date inflows
An actively managed transparent ETF, JGRO combines two time-tested, bottom-up fundamental approaches seeking underappreciated growth opportunities. Microsoft (10.43%), NVIDIA (7.64%) and Amazon (6.53%) are the top three holdings of the fund. The fund charges 44 bps in fees.
Dimensional U.S. Equity ETF DFUS – $733.4 million of year-to-date inflows
The ETF seeks to achieve long-term capital appreciation by investing in U.S. equities. The fund has amassed about $9.6 billion in assets. Microsoft (5.93%), Apple (5.43%) and NVIDIA (4.59%) hold the top three spots in the fund. It charges only 9 bps in fees.
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JPMorgan Equity Premium Income ETF (JEPI): ETF Research Reports
Dimensional U.S. Equity ETF (DFUS): ETF Research Reports
JPMorgan Nasdaq Equity Premium Income ETF (JEPQ): ETF Research Reports
JPMorgan Active Growth ETF (JGRO): ETF Research Reports
GraniteShares 2x Long NVDA Daily ETF (NVDL): ETF Research Reports
