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“Look to Active Strategies” | Value of Active Management in the News
May 27, 2025
In the turbulent markets of recent months, active management – and its value to investors – has been much in the news.
Here is a recap of four recent media stories that caught our eye:
- “Active strategies well-positioned for tumultuous markets,” proclaims Karrie Gordon, writing in etftrends.com on May 13th, in an article titled “As U.S. Stocks Recover YTD Losses, Look to Active Strategies.” Gordon argues that active strategies provide “greater market responsiveness to changing market regimes” because they can fine tune their portfolio based on insights from fundamental research.
- “Amid the noise, active management quietly reinvents itself,” argues TheAdviserMagazine in an early May story, adding, “The index is no longer the boundary between passive and active – it’s the starting point of active decision-making.” Active decision-making has gone beyond mutual funds and is “more structurally embedded in the investment landscape than ever before, the article concludes.
- One of the new ways that active choices are being made is through active ETFs. The new “Global ETF Survey 2025” from Trackinsight notes that active ETFs’ 27% share of the global ETF market is more than double what it was just six years ago, with “turbocharged” growth in Europe, Canada, and Asia Pacific, as well as in the United States. And that growth could well continue. Over two-thirds of financial advisers surveyed expect to increase their allocation to ETFs over the next six months. While the potential for outperformance is the #1 reason for choosing active ETFs, they are also drawn to their lower fees (compared to active mutual funds) and their risk management.
- State Street Global Advisors’ “ETF Impact Report 2025-2026” tells a similar story about the strong flows into active ETFs. Active ETFs have “evolved beyond their traditional role of benchmark outperformance or alpha,” argues senior research strategist Robert Selouan, “Increasingly, they’re now being used to target specific outcomes or improve portfolio risk management.” The flexibility of active ETFs is particularly important right now, suggests head of active portfolio management Toby Warburton. “As market concentration eases and equity returns normalize (to single-digit returns per annum), the added benefit of active management will become more important in hedging against a lower-return world.”
In sum, active management is an essential tool for investors in all aspects of portfolio construction, providing more options for tailoring risk in addition to the potential for outperformance – and investors now have more options for accessing active management.