The post Best Actively Managed ETFs by Marc Guberti appeared first on Benzinga. Visit Benzinga to get more great content like this.
Actively managed funds aim to outperform popular indexes, such as the S&P 500 and the Nasdaq 100. While some of these funds exceed market returns, they tend to have higher expense ratios than average. Actively managed exchange-traded funds (ETFs) employ professionals to conduct research for the funds and adjust portfolio concentrations. You might feel more comfortable knowing someone is keeping an eye on the portfolio, but some actively managed ETFs are better than others.
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7 Best Actively Managed ETFs
Actively managed ETFs can reward long-term investors if the fund managers have good management and objectives. These actively managed ETFs are some of the top picks.
| Symbol | Company | % Change | Price | Dividend Yield | Invest |
|---|---|---|---|---|---|
| MOTO | SmartETFs Smart Transportation & Technology ETF |
+ 0%
|
$45.14 | N/A | Buy stock |
| ARKK | ARK Innovation ETF |
+ 0%
|
$50.65 | N/A | Buy stock |
| TQQQ | ProShares UltraPro QQQ |
+ 0%
|
$46.32 | N/A | Buy stock |
| FBCG | Fidelity Blue Chip Growth ETF |
+ 0%
|
$31.35 | N/A | Buy stock |
| TIME | Capitol Series Trust Clockwise Capital Innovation ETF |
+ 0%
|
$23.83 | N/A | Buy stock |
| JEPI | JPMorgan Equity Premium Income ETF |
+ 0%
|
$55.48 | N/A | Buy stock |
| FAU |
+ 0%
|
$0.000000 | N/A | Buy stock |
1. SmartETFs Smart Transportation & Technology ETF (NYSEARCA: MOTO)
SmartETFs Smart Transportation & Technology ETF (ARCA:MOTO)
45.136
0
[0%]
Sell
Trade Now
–
0 – 45.31
0.00K
0.00K/1.15K
0.00K
0.00K
/0%
0.000
0.00K
The SmartETFs Smart Transportation & Technology ETF focuses on innovative companies in transportation. Investors may benefit from the rising demand for electric vehicles (EVs) and autonomous transportation solutions. The fund holds 35 stocks, with the top three stocks being On Semiconductor (5.00%), NVIDIA (4.67%) and Quanta Services (4.42%). The fund has delivered an annualized return of 19.32% over the past three years and has a 0.68% expense ratio.
2. ARK Innovation ETF (NYSEARCA: ARKK)
ARK Innovation ETF (ARCA:ARKK)
50.650
0
[0%]
Sell
Trade Now
–
29.435 – 53.85
0.00K
0.00K/15.69M
0.00K
0.00K
/0%
0.000
0.00K
The ARK Innovation ETF has been one of the leading ETFs during bullish markets. The fund focuses on high-growth stocks and has generated a 64% year-to-date return and a 0.75% expense ratio. The fund boomed during the pandemic and crashed in 2022. Despite the volatility, the fund has delivered an annualized return of 10.78% since its inception on Oct. 31, 2014. The fund’s top three holdings are Tesla (11.26%), Coinbase (8.66%) and Roku (7.49%).
3. ProShares UltraPro QQQ (NASDAQ: TQQQ)
ProShares UltraPro QQQ (NASDAQ:TQQQ)
46.320
0
[0%]
Sell
Trade Now
–
16.1 – 47.14
0.00K
0.00K/104.97M
0.00K
0.00K
/0%
0.000
0.00K
PtoShares UltraPro QQQ is a 3x leveraged version of the Nasdaq 100 index that delivers exceptional returns during bullish markets. Shares have almost tripled year-to-date, but investors can quickly lose cash if QQQ declines. Half of the fund’s assets are in the Information Technology sector, and the expense ratio is 0.86%.
Investors should look at the concentration of the Nasdaq 100 composite before investing in TQQQ shares. The Nasdaq 100 composite’s largest positions are the Magnificent Seven: Microsoft, Apple, NVIDIA, Amazon, Tesla, Meta and Google, in that order. The upcoming Nasdaq 100 index rebalance will impact total weights, but those stocks will still hold an outsized impact on TQQQ’s performance.
4. Fidelity Blue Chip Growth ETF (BATS: FBCG)
Fidelity Blue Chip Growth ETF (BATS:FBCG)
31.350
0
[0%]
Sell
Trade Now
–
20.46 – 31.56
0.00K
0.00K/16.83K
0.00K
0.00K
/0%
0.000
0.00K
The Fidelity Blue Chip Growth ETF prioritizes the Magnificent Seven stocks, similar to QQQ. Apple and Microsoft each make up 10% of the fund’s total assets. NVIDIA, Amazon, Alphabet, Meta and Tesla make up over 30% of the fund’s assets. Those seven stocks make up more than half of the fund’s total assets, and returns have been good so far.
The fund is up 37% over one year and has an annualized return of 12.26% over the past three years. The expense ratio is 0.59%.
5. Clockwise Capital Innovation ETF (NYSEARCA: TIME)
Capitol Series Trust Clockwise Capital Innovation ETF (ARCA:TIME)
23.828
0
[0%]
Sell
Trade Now
–
0 – 23.9499
0.00K
0.00K/8.44K
0.00K
0.00K
/0%
0.000
0.00K
The Clockwise Capital Innovation ETF gives investors exposure to long-term core growth opportunities and emerging technologies. The fund has a 0.95% expense ratio and spreads its capital across 30 holdings. The company’s top three holdings are SPDR Bloomberg 1 (9.17%), Amazon (7.81%) and Uber (7.10%). The fund has returned 32% over the past year.
6. JPMorgan Equity Premium Income ETF (JEPI)
JPMorgan Equity Premium Income ETF (ARCA:JEPI)
55.480
0
[0%]
Sell
Trade Now
–
49.925 – 57.885
0.00K
0.00K/4.69M
0.00K
0.00K
/0%
0.000
0.00K
The JPMorgan Equity Premium Income ETF isn’t a high-flier, but the fund’s 12-month rolling dividend yield sits at a lofty 10.58%. The fund writes out-of-the-money S&P 500 index call options to distribute monthly payouts to investors. The defensive fund has an expense ratio of 0.35% and has delivered annualized returns of 12.87% over the past three years. The fund doesn’t only invest in options. The top three holdings are Adobe (1.78%), Microsoft (1.73%) and Amazon (1.68%).
7. DFA Dimensional U.S. Core Equity Market ETF (NYSEARCA: DFAU)
Dimensional US Core Equity Market ETF (ARCA:DFAU)
31.910
0
[0%]
Sell
Trade Now
–
24.65 – 31.98
0.00K
0.00K/47.69K
0.00K
0.00K
/0%
0.000
0.00K
The DFA Dimension U.S. Core Equity Market ETF strives to deliver long-term capital growth for investors through U.S. equities. The fund has a low expense ratio of 0.12% and has delivered annualized returns of 10.04% since its inception on Nov. 17, 2020. DFAU has an outsized concentration of stocks in the information technology sector (26.39%). The top three holdings are Apple (6.97%), Microsoft (5.58%) and Amazon (2.52%).
What is an Actively Managed ETF?
An actively managed ETF is a fund with a basket of stocks. Investors who put money into an ETF get instant portfolio diversification that is centered around the fund’s theme. Unlike passive ETFs, actively managed ETFs have investing professionals who monitor the fund’s performance and make decisions about stock positions. Some actively managed ETFs conduct numerous trades, while others make occasional transactions.
Advantages of Actively Managed ETFs
Actively managed ETFs present several advantages for investors:
- Potentially outperform the market: Some actively managed ETFs outperform the market and reward long-term investors.
- You can take a passive approach: It’s easier to look away from your portfolio when you know a professional is watching it for you.
- Quick portfolio diversification: You can invest in an actively managed ETF and automatically have a diversified portfolio. Some actively managed ETFs hold onto over 100 stocks, a feat that is difficult to achieve on your own with sufficient due diligence.
Limitations of Actively Managed ETFs
Actively managed ETFs present several advantages, but they aren’t perfect. You should keep these factors in mind when looking around for actively managed ETFs.
- The expense ratio may be higher: Actively managed ETFs tend to be more expensive than passive ETFs since investors have to pay for each professional’s time.
- Not all actively managed ETFs outperform the market: It’s hard to keep pace with the market, and it’s even more difficult to outperform the market.
- Some actively managed ETFs lose money for their investors: An actively managed ETF is not guaranteed to deliver a positive return on your investment. Some funds experience notable losses and fall further than market indexes during corrections.
Where to Invest in Actively Managed ETFs
Investors can choose from several actively managed ETFs. While you compare ETFs and decide which one is right for you, it is also a good idea to compare brokers. Some brokers offer lower fees and better perks than others. If you are looking for a better broker experience, you may want to consider these top brokers.
Claim Exclusive Offers
get started
securely through Interactive Broker Primary’s
website
Interactive Brokers is a comprehensive trading platform that gives you access to a massive range of securities at affordable prices. You can buy assets from all around the world from the comfort of your home or office with access to over 150 global markets. Options, futures, forex and fund trading are also available, and most traders won’t pay a commission on any purchase or sale.
IBKR is geared primarily toward experienced traders and investors but now with the availability of free trades with IBKR Lite, casual traders can also acclimate to IBKR’s offerings.
Best For
- Access to international markets
- Active traders
- Sophisticated investors
- Detailed mobile app that makes trading simple
- Wide range of available account types and tradeable assets
- IB SmartRouting provides significant price improvement vs. industry
- Fractional trading allows investing regardless of share price
- Industry’s lowest margin rates
- Earn more by lending your fuly-paid shares
- Beginner investors might prefer a broker that offers a bit more hand-holding and educational resources
Get 10 Free Shares
securely through Magnifi’s
website
Magnifi is an intelligently designed marketplace that allows investors to access data-backed information about various investment opportunities. The company combines standard brokerage tools with artificial intelligence (AI) to promote financial competence. Magnifi distinguishes itself from the crowd by offering an AI-powered search feature and an AI-powered investment assistant. Magnifi offers a technology-forward platform that aims to promote confident and capable long-term financial investments.
Best For
- Long-term investors
- Individuals interested in personalized assistance
- New investors that are eager to learn how to start investing
- Access to an AI-powered investing assistant with a Magnifi Personal account
- Commission-free investing
- Over 15,000 possible investments
- Available mobile application
- Limited methods of communication with customer service
get started
securely through Webull’s
website
Webull, founded in 2017, is a mobile app-based brokerage that features commission-free stock and exchange-traded fund (ETF) trading. It’s regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
Webull offers active traders technical indicators, economic calendars, ratings from research agencies, margin trading and short-selling. Webull’s trading platform is designed for intermediate and experienced traders, although beginning traders can also benefit.
Webull is widely considered one of the best Robinhood alternatives.
Best For
- Active traders
- Intermediate traders
- Advanced traders
- No account maintenance fees or software platform fees
- No charges to open and maintain an account
- Intuitive trading platform with technical and fundamental analysis tools
- Does not support trading in mutual funds, bonds or OTC stocks
get started
securely through Robinhood’s
website
Robinhood is a broker designed for traders who want a simple and easy-to-use platform. It takes out all the bells and whistles that can be confusing to the modern day trader, serving as the perfect place for beginners to learn the markets. The interface is intuitive and easy to master, streamlined to ensure you don’t get distracted as you build a portfolio. Though advanced traders might like more thorough analysis tools, Robinhood gives you everything you need to start trading and learn the ropes.
Best For
- Beginner traders
- Mobile traders
- Streamlined, easy-to-understand interface
- Mobile app with full capabilities
- Can buy and sell cryptocurrency
- Fewer analysis tools than most
get started
securely through TD Ameritrade’s
website
This publicly listed discount broker, which is in existence for over four decades, is service-intensive, offering intuitive and powerful investment tools. Especially, with equity investing, a flat fee is charged, with the firm claiming that it charges no trade minimum, no data fees, and no platform fees. Though it is pricier than many other discount brokers, what tilts the scales in its favor is its well-rounded service offerings and the quality and value it offers its clients.
Best For
- Novice investors
- Retirement savers
- Day traders
- World-class trading platforms
- Detailed research reports and Education Center
- Assets ranging from stocks and ETFs to derivatives like futures and options
- Thinkorswim can be overwhelming to inexperienced traders
- Derivatives trading more costly than some competitors
- Expensive margin rates
Diversify Your Portfolio with ETFs
Actively managed ETFs give you access to more stocks and minimize your risk. You won’t have to rely on one stock dictating your portfolio’s performance. Investors can choose from actively and passively managed ETFs and decide what works best for them.
Frequently Asked Questions
How do actively managed ETFs work?
Actively managed ETFs work like any other ETF, but they are managed by people. This active management approach results in higher fees, but some of these funds outperform the market.
Answer Link
Who manages ETFs?
A fund manager and their team of professionals manage active ETFs.
Answer Link
Are actively managed ETFs good?
Actively managed ETFs can produce good returns, but those returns depend on the fund manager’s picks. These funds also have higher expense ratios, which means the assets have to yield higher returns to outperform the market.
Answer Link
Best Actively Managed ETFs Methodology
The methodology for the best actively managed ETFs list involved looking at ETFs that have performed well over the past year. The list has a strong concentration of growth ETFs with some income ETFs.
The post Best Actively Managed ETFs by Marc Guberti appeared first on Benzinga. Visit Benzinga to get more great content like this.