Nick Elward, Senior Vice President and Head of Institutional Product and ETFs for Natixis Investment Managers, joined Zoe Hunt, Host of RIA Channel, to discuss the growing demand for active ETFs and opportunities across fixed income, equities, and derivative income strategies.
Elward expects active ETF assets to reach roughly $600 billion this year, about 50% higher than last year. He points to market volatility, including concerns surrounding monetary policy, fiscal policy, and geopolitical conflicts, as one factor driving demand. He finds that many financial advisors are leaning into active ETFs as a way to potentially protect against volatility. He adds that active ETFs’ downside protection capabilities, coupled with the compression of fees between active and passive, make for a good value proposition.
While advisor interest in active ETFs spans multiple categories, Elward highlights active fixed income products as a particular area of increasing interest. Within U.S. equities, he is also seeing interest in strategies focused on quality and value rather than momentum. For advisors interested in these areas, Natixis offers the Loomis Sayles Total Return Bond ETF (LSTB), Loomis Sayles Dynamic Core Plus ETF (LSCP), and Loomis Sayles Focused Growth ETF (LSGR).
Elward also highlights derivative income, pointing to the Natixis Gateway Quality Income ETF (GQI). The strategy sells calls on 50% of the portfolio, helping limit downside while generating income that has historically ranged from 8% to 11% annualized, paid monthly.
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