Active ETFs: $500B and Counting?

We're seeing advisers look for solutions beyond just traditional indexes. They're looking for alpha managers, but they're looking to be able to be portable with them, to be able to move in and out of managers, things that you can't do in traditional mutual funds that you can do in ETFs. And then, the nice thing about active ETFs is that they still offer the other flexibility the advisers really look for. So trading, control, limit orders, things like that. And when you look at the assets and the equity mutual funds space, it's still roughly $4 out of 5 run after strategies. And I think it will get close to that over time in the ETF spaces. Well, more dollars will move to that. And so for advisers they can use it just like they use ETFs today except it's an alpha basket. It's a manager they can try and add some value for them in their asset allocation strategies. Most managers feel like advisers feel like they have plenty of large cap growth and large cap value strategies. Managers have been doing it for 20 and 40 years. But more advisers are starting to look for things that react to the market whether it's tactical strategies whether it's inverse strategies, long/short strategies. Advisers are definitely looking to add more of that into their portfolio. We looked at the first 5 years of growth for index ETFs and active ETFs and we've seen almost double the assets and more than double the products in that same amount of times. So we are already seeing it grow much more rapidly than index space ETFs did. ETFs especially active ETFs and 401K plans are a strong area of growth. They're just getting started in that space but over time, we expect to see a lot of growth and we think nvestors will be attracted to the transparency, the better operational and tax efficiency for their 401K assets.