Active ETFs: The ETF Industry’s Biggest Scam or Greatest Innovation?

For the past 20 years, the ETF industry has championed passive investing as the ultimate solution: cheap, simple, and market-matching. But now, the same players are pushing active ETFs as the new must-have toy.

Why? Are active ETFs truly ground breaking, or just a clever ruse to juice up product sales? Take DWS. The asset manager is split over active ETFs, with some insiders openly questioning their value.

Are these funds really offering anything new, or is “systematic alpha” just a fancy way to dress up mediocre active strategies? Even DWS’s CEO admits, “You can’t take an average fund, wrap it in an ETF, and it becomes awesome.” He has a point.

So, what’s the deal? Is the ETF industry selling innovation or selling out?

Launches this week

Flows & Performance

ETFs have officially hit record flows in every region around the world with 5 weeks to spare, and what's scary is December tends to be the biggest month flow-wise.

In Europe, flows into actively managed mutual funds have outpaced those for their passive rivals for the first time in 20 months as asset managers attracted their largest product sales for almost three years. Europe-domiciled active funds garnered €33.1 billion of inflows in October, surpassing the €29.2 billion won by passive funds, according to Morningstar data.?

Shout out to Fidelity this week who breached a major milestone recently, $100 billion AUM.

Things of interest

According to the results of an ETF.com survey in the US, 75% of financial advisors say they are somewhat-to-very interested in increasing allocations to actively managed ETFs over the next six months. The survey of more than 250 advisors found that active ETFs currently make up 25% of client portfolios on average. That weighting by far lags the 44% average allocation by index ETFs, but is ahead of 24% allocated to active mutual funds and 11% allocated to index mutual funds.

The CEO of Allfunds, the largest fund distribution platform in Europe has said active ETFs are a "clear threat" to traditional open-ended funds and an internal survey of distributors they ran found that neobanks and commercial banks were particularly interested in active ETPs. The survey showed that 50% of distributors were interested in active ETFs.

Active ETFs domiciled in Europe are likely to hit $1 trillion in AUM by 2030, according to Nick Cherney, head of innovation at Janus Henderson. This will be driven by the expectation, particularly within younger demographics, of the “transparency and timeliness of trading that ETFs provide he says. Hmmmm not sure I agree with him on that.

Bridgewater Associates founder Ray Dalio’s All Weather strategy is coming to the ETF market. SSGA plans to create the SPDR Bridgewater All Weather ETF, according to a regulatory filing. The fund will be sub-advised by Bridgewater, which will provide a daily model portfolio specific to this product.The move marks the latest example of a hedge fund extending into ETFs.

Newly launched options contracts on BlackRock’s spot Bitcoin ETF, the iShares Bitcoin Trust ETF (IBIT), saw almost $2 billion in total exposure traded, which may have helped push Bitcoin to its new high. “$1.9 billion is unheard of for day one,” Bloomberg’s senior ETF analyst Eric Balchunas said.

Career corner

Movers and Shakers

• Marc Knowles has joined Allfunds as Global Head ETP Markets. He was previously a consultant.
• Jordan Blain has joined TD Asset Management as VP ETF Product Strategy. He joins from JPM.

On the Move European Featured Opportunity

• Senior Product Marketing Manager (ETPS) - London:?As the Senior Product Marketing Manager you will take ownership of developing and executing product marketing strategies for a range of innovative crypto ETPs (Exchange Traded Products). This role acts as the bridge between key departments, including sales, research, compliance and product development, while collaborating closely with marketing experts across content, design, motion, events, and website management.

US Featured Opportunity

• Portfolio Manager ETFS & Mutual Funds - Virginia:?This role has three areas of responsibility: managing existing investment portfolios, supporting the Product Development team in developing new investment strategies/products and creating and building out the Portfolio Team’s technology and automation infrastructure utilizing Python, SQL and VBA.

Explore All Open Roles on ETFCareer.com

Tip of the week As year end approaches many folks may be thinking about asking for a pay rises. This can always be tricky so here are some ideas.

1. Research Your Worth: Check salary benchmarks for your role and industry.
2. Show Your Impact: Highlight achievements with specific results and contributions.
3. Pick the Right Time: Align the conversation with reviews or after a big success.
4. Rehearse Your Pitch: Be clear, confident, and state your desired figure.
5. Stay Open: Consider compromises like bonuses or perks if a raise isn’t possible.
6. Stay Positive: Thank them and show commitment, whatever the outcome.

Confidence and preparation are key—know your value and advocate for it.

About us

ETFs: The Mutual Fund Wake-Up Call The ETF evolution is reshaping the European mutual fund industry:

• 62% of managers now see ETFs as a threat, up from 18% in 2021.
• 92% plan to launch or explore ETFs within two years, a staggering jump from 9% in 2021.
• 39% believe ETFs are essential for competitiveness, compared to just 9% in 2021.

The message is clear: adapt or risk irrelevance. At Blackwater, we help mutual fund managers navigate this shift—market entry, branding, talent acquisition, and more. Let’s turn this challenge into your next opportunity. Ready to talk?

Get in Touch

At Blackwater, we specialize in recruiting top-tier talent for the ETF industry while providing educational resources to empower both candidates and organizations.?Our mission is to bridge the gap between exceptional talent and innovative firms, ensuring that our clients thrive in a competitive landscape.?If you would like to discuss any of the above, respond to this email or reach out to [email protected].

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