Macquarie ETFs_What are active ETFs_Blog

What are active ETFs?

Actively managed exchange-traded funds, or active ETFs, provide investors the convenience and simplicity of an exchange-listed fund, with the potential to achieve above-benchmark returns – thanks to dedicated fund management expertise.

More US investors are turning to active ETFs, with assets eclipsing $530 billion in 2023, up from $91 billion in 2019 when regulatory developments enabled additional product offerings.ETFs have broad appeal, because they can provide exposure to a wide range of companies, regions, asset classes, and strategies – in a single trade. Active ETFs, offering the ability to access active investment expertise with the potential for tax efficiencies, have become more popular with investors seeking strategies that can outperform their respective benchmarks.

What are active ETFs?

As the name suggests, active ETFs are actively managed investments. These listed funds have a professional team of managers making decisions to meet a particular investment objective, such as outperforming a set benchmark or investing in specific asset classes or sectors.

Active ETF investment decisions can relate to asset or sector allocations, as well as to individual stock and bond selection. Most ETFs in the US are passive ETFs that try to replicate a certain index, such as the S&P 500® Index, meaning they try to match the market, not outperform it. The value of a passive ETF generally goes up or down with the index or asset that it’s tracking for a like-for-like return. 

Both active and passive ETFs can play a role in your portfolio. Both can provide exposure to a broad range of asset classes, sectors, and global markets, and help diversify and balance your portfolio in line with your investment strategy and goals. Passive ETFs generally give you low-cost access to index performance, while active ETFs provide the potential to access institutional-level, specialist investment expertise.

Why active ETFs?

Active ETFs already make up the fastest-growing share of the US investment market, comprising more than 5% of overall ETF assets under management and outpacing the investment dollars flowing into mutual funds.1 This trend is expected to continue as the number of active ETFs expands, giving investors more options. In fact, almost three-fourths of the ETFs launched in 2023 were active ETFs.1

However, like shares of a company’s stock, they are bought and sold on an exchange, such as the New York Stock Exchange, through a stockbroker or online brokerage account. Most active ETFs also have the added advantage of greater transparency of the underlying holdings through daily reporting, and greater visibility of the buy/sell price in relative real time via the exchange publishing the market price of the active ETF throughout the trading day.

Morningstar Direct.

Investing in any exchange-traded fund involves the risk that you may lose part or all of the money you invest. 

Carefully consider the Fund's investment objectives, risk factors, and charges and expenses before investing. This and other information can be found in the Fund's prospectus or the summary prospectus, which may be obtained by visiting the Macquarie ETF Trust resource pages or calling 844 469-9911. Read the prospectus carefully before investing.

The Macquarie ETF Trust Funds are distributed by Foreside Financial Services, LLC. Foreside Financial Services, LLC is not affiliated with any Macquarie entity, including Macquarie Asset Management and Delaware Distributors, L.P.

The S&P 500 Index measures the performance of 500 mostly large-cap stocks weighted by market value, and is often used to represent performance of the US stock market.

All third-party marks cited are the property of their respective owners.

Nothing presented should be construed as a recommendation to purchase or sell any security or follow any investment technique or strategy.

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