Active exchange-traded funds (ETFs) have become a major focus in the investment world this year, drawing significant attention from top fund companies. With over $800 billion in assets and an influx of approximately $250 billion in 2024, their growth is undeniable.
Unlike mutual funds, active ETFs often capitalize on tax-efficient structures, such as in-kind transactions, which allow them to manage gains without triggering taxable events. Recent data indicates that only a small fraction of active ETFs distribute capital gains, making them attractive for tax-conscious investors compared to mutual funds, which tend to have higher payouts.
Notably, many new active ETFs and clone strategies, launched alongside mutual fund versions, have kept capital gains distributions minimal.
Finsum: This is a good sign of the trend in the regulatory environment and could pave the way for more efficient portfolio solutions.
- active etfs
- active management
- tax efficiency
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
