Actively managed ETFs hit $1 trillion milestone: Why tariff uncertainty may spark more growth

cnbc.com:

In this article

It's milestone month for the exchange-traded fund industry.

Actively managed ETFs now have more than $1 trillion in assets under management, according to independent research firm ETFGI.

That's roughly the market cap of Berkshire Hathaway, Saudi Arabia's gross domestic product and the value of 121 New York Yankees franchises.

The ETF Store's Nate Geraci thinks it will grow even bigger due to the appetite for new active investing strategies.

«It's interesting for an industry where the roots are passively managed products. That's what the industry was built on,» the firm's president told CNBC's «ETF Edge» this week. "It's interesting to see active ETFs getting all of the attention right now."

Geraci finds most of the flows are going into «much more systemic strategies,» including a combination of passive and aggressive.  

«When you look at the growth in the number of actively managed ETFs out there … these aren't what you necessarily think of as traditional active,» he added. «It is products like options-based income ETFs [and] buffer ETFs.»

Actively managed ETFs now comprise almost one-tenth of the ETF industry, according to VettaFi's Kirsten Chang.

In a special email to CNBC, Geraci said he thinks increased uncertainty tied to President Donald Trump's tariffs will spark even more interest.

"Worries were mounting about the concentration risk in market-cap-weighted indices and stretched valuations. Now, toss in this latest chaos surrounding tariffs, and the environment appears ripe for active ETFs," wrote Geraci. «Any time there is increased uncertainty and market volatility, some investors and financial advisors will simply feel better having an active manager at the wheel to help navigate.»