Not so long ago, actively managed exchange-traded funds were rare. Now, they’re being created at twice the rate of their passive rivals.
Inspired by the success of Cathie Wood’s ARK Innovation ETF, issuers launched 115 active products this year versus just 51 passive funds, according to Bloomberg data.
That’s the first time active launches have ever outstripped passive, and it’s powering the $6.5 trillion ETF market towards its busiest 12 months on record.
It’s a comeback of sorts for stock pickers – and in an unlikely corner of Wall Street. Most active managers fail to beat their benchmarks net of fees – a fact that has seen passive ETFs lure roughly $3tn over the past decade, while active funds gained only about $200 billion.
But a combination of new rules and the enduring popularity of ETFs with investors means a slow but major shift is under way.
“It’s almost impossible to start a small-to-medium hedge fund as a single manager,” Nathan Miller, a portfolio manager for New York-based Emles Advisers, said. “So we thought why go launch another hedge fund? Let’s launch an actively managed ETF.”
The Emles Alpha Opportunities ETF (EOPS), which packages fast-money strategies in an exchange-traded wrapper, is one of the more recent active arrivals. It listed less than two weeks ago and already has about $66 million in assets.
Major rule changes in late 2019 paved the way for funds like EOPS. It became easier to deploy stock-picking strategies in an ETF, and new structures evolved that would help keep exact investment strategies hidden.
Active funds remain a small slice of the industry, and their assets make up just 3.4 per cent of the overall ETF market. But that’s up from 2.7 per cent a year ago. And in a sign the trend could continue, several large Wall Street firms who long held-out against ETFs are now embracing them.
It's almost impossible to start a small-to-medium hedge fund as a single manager
Firms are also ramping up their thematic offerings, which invest according to compelling narratives like autonomous driving or sports betting.
A record 22 thematic funds have launched since the start of the year, including Ms Wood’s $619m ARK Space Exploration ETF and BlackRock’s $1.4bn US Carbon Transition Readiness ETF, which set a record in April with the industry’s biggest-ever launch.
Roundhill Investments’ MVP ETF, which is focused on companies that own or support professional sports teams, Defiance’s Hotel Airline and Cruise ETF and Bitwise Asset Management’s Crypto Industry Innovators ETF were among other thematic debuts.
For many, the aim is to tap the boom in retail investing that has seen individuals grow to comprise more than 20 per cent of equity trading participation, according to Bloomberg Intelligence.
“That’s really been a catalyst to help get some of these thematic ETFs off the ground quickly,” Ben Slavin, head of ETFs for BNY Mellon Asset Servicing, said.
Although not technically classified as a thematic fund, the retail-friendly VanEck Vectors Social Sentiment ETF made waves earlier this year when it launched with an endorsement from Barstool Sports founder Dave Portnoy.
The fund posted one of the best debuts in the industry’s history in March and currently has more than $243m in assets.
As the new arrival count surges, the number of exiting funds has plunged.
So far this year, only 19 ETFs have liquidated or delisted, according to data compiled by Bloomberg. That compares with 104 in the first half of 2020 and 79 during the same period in 2019.
Much of that endurance can be attributed to the bull market. Stocks have been repeatedly breaking records and cash has been flowing readily through the market. About 67 per cent of US-listed ETFs have taken in cash so far in 2021, according to Bloomberg Intelligence – meaning issuers are less likely to pull the plug.
“There’s generally increased optimism as we come out of the pandemic, and people are more excited and feeling more optimistic about their business development,” Amrita Nandakumar, president of Vident Investment Advisory, said. “Fundraising is easier in a bull market.”
Killing of Qassem Suleimani
If you go
The flights
There are direct flights from Dubai to Sofia with FlyDubai (www.flydubai.com) and Wizz Air (www.wizzair.com), from Dh1,164 and Dh822 return including taxes, respectively.
The trip
Plovdiv is 150km from Sofia, with an hourly bus service taking around 2 hours and costing $16 (Dh58). The Rhodopes can be reached from Sofia in between 2-4hours.
The trip was organised by Bulguides (www.bulguides.com), which organises guided trips throughout Bulgaria. Guiding, accommodation, food and transfers from Plovdiv to the mountains and back costs around 170 USD for a four-day, three-night trip.
Some of Darwish's last words
"They see their tomorrows slipping out of their reach. And though it seems to them that everything outside this reality is heaven, yet they do not want to go to that heaven. They stay, because they are afflicted with hope." - Mahmoud Darwish, to attendees of the Palestine Festival of Literature, 2008
His life in brief: Born in a village near Galilee, he lived in exile for most of his life and started writing poetry after high school. He was arrested several times by Israel for what were deemed to be inciteful poems. Most of his work focused on the love and yearning for his homeland, and he was regarded the Palestinian poet of resistance. Over the course of his life, he published more than 30 poetry collections and books of prose, with his work translated into more than 20 languages. Many of his poems were set to music by Arab composers, most significantly Marcel Khalife. Darwish died on August 9, 2008 after undergoing heart surgery in the United States. He was later buried in Ramallah where a shrine was erected in his honour.
COMPANY%20PROFILE%20
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The Voice of Hind Rajab
Starring: Saja Kilani, Clara Khoury, Motaz Malhees
Director: Kaouther Ben Hania
Rating: 4/5
KILLING OF QASSEM SULEIMANI
KILLING OF QASSEM SULEIMANI
Zayed Sustainability Prize
Results:
5pm: Handicap (PA) | Dh80,000 | 1,600 metres
Winner: Dasan Da, Saeed Al Mazrooei (jockey), Helal Al Alawi (trainer)
5.30pm: Maiden (PA) | Dh80,000 | 1,600m
Winner: AF Saabah, Tadhg O’Shea, Ernst Oertel
6pm: Handicap (PA) | Dh80,000 | 1,600m
Winner: Mukaram, Pat Cosgrave, Eric Lemartinel
6.30pm: Handicap (PA) | Dh80,000 | 2,200m
Winner: MH Tawag, Richard Mullen, Elise Jeanne
7pm: Wathba Stallions Cup Handicap (PA) | Dh70,000 | 1,400m
Winner: RB Inferno, Fabrice Veron, Ismail Mohammed
7.30pm: Handicap (TB) | Dh100,000 | 1,600m
Winner: Juthoor, Jim Crowley, Erwan Charpy
How much do leading UAE’s UK curriculum schools charge for Year 6?
- Nord Anglia International School (Dubai) – Dh85,032
- Kings School Al Barsha (Dubai) – Dh71,905
- Brighton College Abu Dhabi - Dh68,560
- Jumeirah English Speaking School (Dubai) – Dh59,728
- Gems Wellington International School – Dubai Branch – Dh58,488
- The British School Al Khubairat (Abu Dhabi) - Dh54,170
- Dubai English Speaking School – Dh51,269
*Annual tuition fees covering the 2024/2025 academic year
The five pillars of Islam
More on Quran memorisation:
Killing of Qassem Suleimani
Red Sparrow
Dir: Francis Lawrence
Starring: Jennifer Lawrence, Joel Egerton, Charlotte Rampling, Jeremy Irons
Three stars
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Indoor cricket in a nutshell
Indoor Cricket World Cup – Sep 16-20, Insportz, Dubai
16 Indoor cricket matches are 16 overs per side
8 There are eight players per team
9 There have been nine Indoor Cricket World Cups for men. Australia have won every one.
5 Five runs are deducted from the score when a wickets falls
4 Batsmen bat in pairs, facing four overs per partnership
Scoring In indoor cricket, runs are scored by way of both physical and bonus runs. Physical runs are scored by both batsmen completing a run from one crease to the other. Bonus runs are scored when the ball hits a net in different zones, but only when at least one physical run is score.
Zones
A Front net, behind the striker and wicketkeeper: 0 runs
B Side nets, between the striker and halfway down the pitch: 1 run
C Side nets between halfway and the bowlers end: 2 runs
D Back net: 4 runs on the bounce, 6 runs on the full
Venue: Sharjah Cricket Stadium
Date: Sunday, November 25
The%20specs
%3Cp%3E%3Cstrong%3EPowertrain%3A%20%3C%2Fstrong%3ESingle%20electric%20motor%0D%3Cbr%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E201hp%0D%3Cbr%3E%3Cstrong%3ETorque%3A%20%3C%2Fstrong%3E310Nm%0D%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3ESingle-speed%20auto%0D%3Cbr%3E%3Cstrong%3EBattery%3A%20%3C%2Fstrong%3E53kWh%20lithium-ion%20battery%20pack%20(GS%20base%20model)%3B%2070kWh%20battery%20pack%20(GF)%0D%3Cbr%3E%3Cstrong%3ETouring%20range%3A%20%3C%2Fstrong%3E350km%20(GS)%3B%20480km%20(GF)%0D%3Cbr%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3EFrom%20Dh129%2C900%20(GS)%3B%20Dh149%2C000%20(GF)%0D%3Cbr%3E%3Cstrong%3EOn%20sale%3A%3C%2Fstrong%3E%20Now%3C%2Fp%3E%0A
Mohammed bin Zayed Majlis
Volvo ES90 Specs
Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)
Power: 333hp, 449hp, 680hp
Torque: 480Nm, 670Nm, 870Nm
On sale: Later in 2025 or early 2026, depending on region
Price: Exact regional pricing TBA
