On a global scale, more investors are continuing to turn to active exchange-traded funds (ETFs) in 2024. That said, Vanguard has a pair of bond options if fixed income investors are looking to get active with their portfolio.
"At the global level, Morningstar data shows that in the first half of 2024 actively managed ETFs have captured a quarter of flows despite representing just 7 per cent of ETF assets, with the annualized growth rate running at 20 per cent a year," reported the Financial Times. "Worldwide, actively managed assets grew to a record $889bn after starting the year at $714bn."
One of the reasons for the growing interest is the lower costs. Active funds are increasingly becoming more competitive in terms of price when compared to their passive counterparts.
Active bond ETFs in particular are also seeing more interest as fixed income investors would rather leave it up to portfolio managers who can navigate a murky bond environment. With the U.S. Federal Reserve having to perform a balancing act between easing monetary policy and guiding the economy to a soft landing, now is an ideal time for active exposure.
2 Options from Vanguard
Vanguard has a pair of active bond ETF options in the Vanguard Core Bond ETF (VCRB) and the Vanguard Core-Plus Bond ETF (VPLS). Both funds allow investors to harness the deep well of talent from the Vanguard Fixed Income Group. As mentioned, given that the bond market has its own set of intricacies, the Vanguard Fixed Income Group has the necessary education and experience to navigate through these complexities.
As mentioned, lower costs is another factor contributing to the growing interest of active ETFs. That said, VCRB and VPLS carry 0.10% and 0.20% expense ratios, respectively.
