In today’s dynamic market, exchange-traded funds (ETFs) are proving their ability to compete even in the midst of a “stock picker’s” paradise, as highlighted by a prominent investor.
Eduardo Repetto, Chief Investment Officer of Avantis Investors, expressed confidence that active ETFs can hold their ground by offering the advantages associated with active management and stock picking, combined with the added benefits of tax efficiency and lower costs typically associated with ETFs. Speaking on CNBC’s “ETF Edge,” Repetto observed a notable influx of funds into active ETFs and anticipated their continued growth throughout the latter half of the year.
Repetto acknowledged the historical dominance of index-based ETFs, remarking on a significant shift that has occurred over the past three years. The proliferation of actively managed ETFs has revolutionized the landscape, expanding investors’ choices and opportunities.
Under Repetto’s guidance, Avantis Investors has spearheaded the Avantis U.S. Equity ETF, a portfolio that actively manages a diverse selection of U.S. stocks. Noteworthy constituents of this fund, as displayed on the company’s website, include technology giants such as Apple, Microsoft, Amazon, Meta Platforms, and Alphabet.
Performance-wise, as of Friday’s closing, the ETF has achieved a commendable 12% gain since the beginning of the year and an impressive 49% increase over the past three years.
The success of active ETFs in the current environment showcases their adaptability and ability to thrive amidst the complexities of a market increasingly focused on individual stock selection. Investors can benefit from the best of both worlds: the expertise of active management combined with the tax efficiencies and cost advantages associated with ETFs. As the demand for active ETFs continues to surge, it is clear that they have carved out a valuable niche for themselves in the investment landscape.