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Top Performing Actively Managed ETFs
In a market dominated by passive investing, a select few actively managed ETFs have managed to outperform their benchmarks by a significant margin this year. Despite the uncertainty surrounding global financial markets, these 15 exchange-traded funds across various sectors worldwide have delivered returns that exceed their benchmarks by more than 15 percentage points year to date. CNBC Pro conducted a screening of over 1,000 ETFs listed worldwide using FactSet benchmark data to identify these top performers.
Carbon Neutral Active ETF
South Korean asset manager Timefolio's Carbon Neutral Active ETF takes the top spot for delivering the biggest alpha this year. With an impressive 81% return, the fund has surpassed the broader MSCI Korea IMI index by 59 percentage points, according to FactSet data. The fund focuses on companies that are actively reducing carbon emissions in the country's economy. By investing in high-growth stocks and profitable secondary battery-makers, it has achieved significant returns.
Meet Kevin Pricing Power ETF
The Meet Kevin Pricing Power ETF is the third best-performing fund on CNBC Pro's screen, boasting a 63% total return this year. It has outperformed the benchmark MSCI USA IMI index by more than 44 percentage points. Lead fund manager Kevin Paffrath, known for his YouTube videos, strategically invests in U.S.-listed companies that have pricing power compared to their peers.
These actively managed ETFs have showcased their ability to outperform their respective benchmarks in a market dominated by passive investing. With returns significantly exceeding those of their passively managed counterparts, these ETFs have proven their worth. Investors should consider these funds for potential opportunities for alpha generation and market-beating returns.
Impact on New Business
The success of these top-performing actively managed ETFs in outperforming their benchmarks highlights an interesting opportunity for new businesses in the financial sector. As the market continues to be dominated by passive investing, there is a growing demand for active management that can deliver superior returns.
For new businesses entering the ETF space, this presents a chance to differentiate themselves by offering actively managed funds that have a proven track record of beating the market. By focusing on specific themes or sectors like the Carbon Neutral Active ETF, new businesses can tap into the growing interest in sustainable investing and offer investors the potential for significant returns.
Additionally, the Meet Kevin Pricing Power ETF exemplifies the value of an active manager's expertise in identifying companies with pricing power. A new business could differentiate itself by employing similar strategies that target companies with unique competitive advantages, providing investors with the potential for market-beating returns.
Furthermore, these top-performing actively managed ETFs demonstrate that there is still room for alpha generation in the market. New businesses can seek to bring innovative investment strategies and proven track records to attract investors looking for opportunities beyond traditional passive index funds.
In conclusion, the success of these actively managed ETFs presents an enticing opportunity for new businesses to enter the market and offer investors the potential for alpha generation and market-beating returns. By leveraging specific themes, sectors, and expert fund management strategies, new businesses can stand out in a market dominated by passive investing and attract investors seeking superior performance.
Article First Published at: https://www.cnbc.com/2023/07/21/these-active-etfs-beat-their-benchmarks-by-more-than-15-percentage-points-this-year.html