Actively managed exchange-traded funds (ETFs) are increasingly becoming a preferred investment vehicle, with assets under management exceeding US$2.5 trillion1. In the past 12 months between April 2025 to Mach 2026, half of all new ETFs launched globally are actively managed2. Despite their growing popularity, many investors still assume active ETFs are limited to the stock market, perhaps because equities still dominate the ETF landscape.
What asset classes do active ETFs cover?
Active ETFs are not restricted to equities. In fact, the very first active ETF3, launched in 2008, was a fixed income product. Now, active ETFs span a broad range of asset classes, including bonds, commodities, multi-asset strategies, and alternatives. As the universe of active ETFs expands, investors may use these vehicles for diversification, risk management, and tactical opportunities across nearly every asset class.
How are active ETFs shaping the fixed income landscape?
The growth of active fixed income ETFs reflects changing investor preferences. In the first three months of 2026, investors allocated US$62 billion to active fixed income ETFs or a record 38% of all global fixed income ETF flows. Allocations have increased from just 6% of all fixed income ETF flows in 20222.
Three reasons why active fixed income ETFs are gaining traction:
- Passive indices such as the Bloomberg US Aggregate Index cover only a portion of the market, excluding around 49% of the US$58 trillion US public bond market, including high-yield corporates and non-agency mortgage-backed securities. Asset-backed and agency securities are also underrepresented, leaving much of the securitised market beyond the Index’s reach4.
- Active fixed income ETFs present greater flexibility and broader market access compared to passive options, allowing managers to shift between sectors, adjust duration and credit risk, and seek out opportunities in overlooked segments.
- Historically, active managers have outperformed passive strategies, with average annualised returns exceeding the Bloomberg US Aggregate Index over three-, five-, and 10-year periods5.
Why select active ETFs for dynamic markets?
Innovation is now driving the growth of multi-asset active ETFs. These vehicles combine equities, bonds, and alternative assets, presenting investors with a diversified, professionally managed portfolio through a single trade. Asset managers can adjust allocations in response to market conditions, aiming to enhance returns and manage risk more effectively than static, index-based approaches.
Conclusion
Active ETFs are no longer limited to equities. They now cover a wide range of asset classes. As innovation continues and the breadth of offerings expands, active ETFs are set to play an increasingly important role in diversified portfolios. Investors are empowered to respond dynamically to changing market conditions and seize opportunities across the investment landscape.