Active ETFs take 37% of flows on a three-year-old shelf
A flow share three times the asset share is wrapper migration, and the experience premium incumbents sell has an 18-month shelf life.
Active ETFs have taken 37% of total ETF flows this year while holding 13% of industry assets, per ETF Trends—a flow share nearly three times the asset share, and the one number worth carrying out of a piece built around American Century Investments' Focused Dynamic Growth ETF (FDG), which appears in the outlet's Core Strategies content hub.
The argument inside it is about seasoning. Sandra Testani, American Century's head of ETF product and strategy, writes that almost 70% of the active ETFs now on the market launched within the past three years, while her firm opened its first active ETFs in 2018—an argument an incumbent is positioned to make, but one that lands on a real problem: when launches outrun the shelf, track record is what an advisor has left to sort by, and most of the shelf has a short one.
FDG, which marked five years of operation in March, charges 45 basis points, and its three-year return of 25.9% sits against a 17.1% average for its ETF Database large cap growth category, per the article. The spread is real and the fee is not small; a 45-basis-point growth fund has to keep earning that gap, and the wrapper's tax efficiency, genuine as it is, will not do that for it.
American Century's active line extends past the flagship, where KORP, its active corporate bond ETF, approached $1 billion after adding nearly $200 million in six months, and QINT has taken in more than a third of its asset base this year on model-portfolio demand, per ETF.com records—a manager eight years into the wrapper has a product family behind it.
The 37% figure also reads as wrapper migration rather than new allocation, hard to interpret any other way when flow share runs that far ahead of asset base, though the article does not break the flows down by origin. This publication has argued that managers still defending mutual-fund shelves are spending the next five years of flows to protect a fee schedule; the arithmetic on this page is the case.
The differentiator has a shelf life: nearly 70% of the category is three years old or younger, which implies three-year records will print in bulk over the next 18 months, from strategies that have seen one regime rather than a full cycle. Seasoning is scarce now and will not be in 2027, at which point the 45 basis points has to carry the argument alone.