Investment Ideas

What are active ETFs?

What are active ETFs
Published: 21/06/2024

Exchange-traded funds (ETFs) are investment vehicles that bundle securities into diversified pools. They are bought and sold on an exchange, like a stock, giving investors access to markets and their money throughout the trading day.

The growth of ETFs has meant that different types of ETFs are now available including passive and active ETFs. In this video, we will explain the basics of active ETFs in 1 min.

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Video transcript

Maybe you have had experience in investing in passive ETFs.

No matter whether the market goes up or down, your returns follow.

But not all ETFs are the same.

In fact, there are many different types of ETFs.

An ETF is an investment vehicle that can accommodate a range of investment strategies, at the same time riding on the benefits of the ETF structure.

If an ETF is driven by active management, it’s an active ETF.

Like other ETFs, active ETFs are cost effective, typically transparent in daily holdings and can be traded throughout the day. They offer easy access to investments worldwide.

Besides, they have investment professionals to oversee and look for outperformance.

Getting bumpier in the market? Active ETF managers can take prompt adjustments to manage risks.

As the market grows, active ETFs are getting more popular in the investment world.

Take your seat, and come along for the journey to explore the ETF world with us.

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J.P. Morgan Asset Management