Actively managed exchange-traded funds are on the rise. First introduced in 2008,1 active ETFs have taken off in recent years, with global assets under management surging to an all-time high of nearly $1.1 trillion in 2024, fuelled by robust inflows.2 The market is dominated by US-listed funds, though investor demand in the rest of the world has increased.3 In Europe, assets in active ETFs rose sharply last year to $56.7 billion.4
For investors, active ETFs offer all the advantages of the ETF wrapper. They are cost-effective and offer intraday trading at a known price just like stocks, as well as offering greater transparency on holdings. Unlike passive ETFs that track an index, however, the active variety are managed by investment professionals with the goal of achieving specific outcomes, including capturing market inefficiencies, targeting investment themes such as sustainability, outperforming a benchmark, and generating income.
At Goldman Sachs Asset Management, we believe the active ETF market will continue to expand, and that the active component of these funds will be critical in driving market growth. We think active ETFs offer investors a flexible, efficient way to gain exposure to key fixed income markets in the year ahead. In this market especially, an active approach can help investors seize potential opportunities and help manage risks that may arise.
