After decades of dedication to growing actively managed strategies within listed fund structures, investment trusts and REITs, I thought I had a fairly comprehensive view of the landscape. But reading our latest market overview research, European active ETFS – A growing and evolving market this week was a timely reminder of how much the investment trust market is mainly focused on strategies that suit that structure, and that there is a much larger pond out there. Many strategies are naturally better suited to open-ended vehicles, and the active ETF market brings additional benefits over its unit trust cousin (instant dealing and the ability to hold funds alongside your equity portfolio on a trading account), making it a simple click-and-go experience sitting within the mix of my investment trusts and shares. 

To help demystify this part of the market, I’ve outlined a few key approaches of these funds that might broaden perspectives and deepen understanding. 

Against that backdrop, it’s worth looking at the range of approaches that sit under the “active ETF” umbrella. At heart, these funds simply take the skills of professional managers, the same stock-pickers and asset allocators we’ve known for years, and place their strategies inside a structure that trades like a share (tracking Net Asset Value). Below is a quick tour through the main styles you’ll find in the market today, which does differ – plus a few names I thought you might recognise. 

Equity-based philosophies 

These are the most familiar, mirroring to some extent the investment trust landscape, discretionary approaches designed to outperform the broader market: 

Value investing – seeking companies trading below their intrinsic worth, with the expectation that markets eventually catch up. 

Growth investing – backing businesses with strong future earnings potential, often in innovative sectors such as technology or healthcare. 

Core/blend strategies – mixing growth and value to build a more balanced, all-weather equity portfolio. 

Size-focused investing – targeting companies by scale, from dependable large-caps to smaller firms where market inefficiencies can offer fertile ground for active managers. 

Global and regional mandates – applying specialist insight to particular geographies, from emerging markets to developed economies, tailoring portfolios to local opportunities and risks.  

Fixed-income tactics 

If ever there were a part of the market where active management earns its keep, it’s bonds — with all their moving parts around credit quality, duration and interest-rate cycles: 

Total-return bond strategies – shifting dynamically across different types of debt to balance income, risk and sensitivity to rate changes. 

Capital-preservation approaches – using ultra-short or short-duration instruments to reduce volatility and protect capital, suiting more cautious mandates. 

High-yield credit – drawing on specialist credit analysts to uncover opportunities in riskier corporate debt, where careful issuer selection can make a material difference. 

Flexible income allocation – moving between government, corporate and structured debt markets to capture the best opportunities as conditions evolve. 

For fixed-income or multi-asset exposure, firms like J.P. Morgan Asset Management have also grown out their active ETF offering. The firm is now the largest provider by some way, owning 40-50% of the AUM in European listed active ETFs. 

Specialist and advanced risk management strategies 

Some active ETFs push further, using sophisticated tools or very targeted exposures to deliver specific outcomes: 

Thematic investing – focusing on major structural shifts such as artificial intelligence, renewable energy or demographic change. e.g. ARK Invest

Quantitative and factor-rotation models – systematically adjusting exposure to factors like momentum, quality or low volatility depending on which are expected to lead. 

Hedged or buffered approaches – using derivatives to limit downside risk or provide a defined level of protection during market drawdowns. 

Covered-call income strategies – generating extra income by writing call options on the portfolio’s holdings, with the trade-off of capping some upside. 

Market-neutral funds – balancing long and short positions to remove broad market exposure entirely, aiming for steady returns through varying conditions. 

ARK Invest stands out with thematic and innovation-focused ETFs – they’ve really helped expand the appeal of active ETFs beyond traditional equity strategies.  

Why those names matter (and what to check) 

Active ETF managers like ARK and J.P. Morgan show that the approach isn’t just theoretical – large, established asset managers are backing it. 

Because these strategies trade like shares, you get the intraday flexibility and liquidity of a typical ETF, while still benefiting from active decision-making.  

That said, as with any active strategy, success depends heavily on the manager’s skill and the market conditions – which means these products deserve the same careful scrutiny as any actively managed fund. There is a lack of trusted third-party providers researching them. As we have learnt, wealth managers can’t buy investment trusts without research to support their reasons to buy, which will be the same for active ETFs. Often the ETF can be tiny, meaning growing in the first few years will be critical before reputational questions are asked, and as the ETF world is absent of a house broker providing coverage, like other listed funds – investment trusts, REITs and holding companies – with resources set up for passive ETFs, are the main parties of the publishers, investment advisors, and the platforms enough? 

If you would like to learn more about our listed fund research, please reach out to our Head of active ETFs, David Batchelor, our new Head of News (starting in January) or myself, who all work alongside our Investment Trust team.  

QuotedData has been a long-standing supporter of active management in listed structures for fourteen years. Providing education, research and supporting the press with informed timely news coverage of the whole market. But also partnering with the best management teams, platforms, and giving many more investors (professional and retail) free reliable information to make more informed decisions.