Recapping the “Year of Active”
January 14, 2021
At the beginning of 2020, the New York Stock Exchange proclaimed it could be the “Year of Active” in ETFs and, we must admit, the year exceeded our expectations. The industry set new high watermarks across the board:
- Assets under management (AUM): $172.8 billion, a 71% increase from year-end 2019.
- Full year cash flow: $60 billion, shattering the 2018 record of $27.4 billion.
- Products launched: 167 - roughly half of all ETFs launched in 2020 were actively managed.
- Active ETF Sponsors: 93, including 31 new entrants in 2020.
Need more? Implied active ETF revenue (Average Annual AUM x Expense Ratio) soared to over $600 million, nearly doubling the 2019 total of $350 million. Lastly, the industry welcomed 19 novel active ETFs that don’t disclose their portfolio holdings daily (known commonly as active, non-transparent (ANTs) or semi-transparent ETFs) that have accumulated $1 billion in assets.
The Growth of Active ETFs
The actively managed ETF industry grew across all asset classes during 2020. Fixed Income flows led the way with $29.4 billion, concentrated in ultra and short-term ETFs as well as intermediate-term “Core” ETFs. Equity flows were the story of the year, growing substantially to $26.7 billion in 2020 from $4 billion in 2019. Thematic ETFs (i.e., Innovation, Robotics, etc.) dominated flows with over $20 billion, followed by large cap U.S.-focused defined outcome and style ETFs.
2020 Active ETF Fund Flows by Asset Class
At the issuer level, ARK Invest officially unseated First Trust for the 2020 cash flow crown with a record-shattering $20.4 billion. A remarkable year placed them at #5 in total ETF industry cash flow and vaulted ARK to #12 on the ETF issuer league tables. Collectively, the top five issuers accounted for 70% of cash flow -- the lowest-ever combined share for the industry.
Despite this, four of the top five ETF active issuers experienced a record cash flow year. Across the industry, more than 25 issuers experienced new annual cash flow records. Translation: growth is strong and, unlike the passive ETF industry, it’s not winner take all. Just outside of the top five, Janus Henderson ($2.45 billion), American Century ($1.97 billion), ETC ($1.58 billion) and Fidelity ($1.19 billion) all surpassed the $1 billion cash flow mark for the first time. Other notable year-over gainers include Invesco (+1.3 billion), Quadratic (+$0.78 billion), Amplify (+$0.39 billion), Virtus (+$0.28 billion) and WisdomTree (+$0.27 billion).
Top 5 Issuers by Cash Flow Annually (2016 – 2020)
2020 wasn’t all about the legacy players, as 31 active ETF issuers entered the market for the first time. These issuers were rewarded with $1.18 billion in cash flow, led by Dimensional Funds ($350 million), LeaderShares ($151 million), Simplify ($91 million), Tuttle Tactical ($85 million) and T. Rowe Price ($80 million). In total, four out of every five issuers and nearly three out of every four active ETFs experienced positive cash flow during 2020.
Top 10 ETFs by Cash Flow ($B) | ||
|---|---|---|
ARKK |
ARK Innovation |
9.56 |
JPST |
JPMorgan Ultra-Short Income |
5.33 |
ARKG |
ARK Genomic Revolution |
5.23 |
FIXD |
First Trust TCW Opp. Fixed Income |
3.38 |
ARKW |
ARK Next Generation Internet |
2.99 |
LMBS |
First Trust Low Duration Opportunities |
2.65 |
ICSH |
iShares Ultra-Short Bond |
2.61 |
VNLA |
Janus Henderson Short Duration Income |
1.84 |
ARKF |
ARK Fintech Innovation |
1.53 |
ARKQ |
ARK Autonomous Tech & Robotics |
1.12 |
|
Top 10 Total Cash Flow |
36.24 |
Bottom 10 ETFs by Cash Flow ($B) | ||
|---|---|---|
NEAR |
iShares Short Maturity |
(1.88) |
GDVD |
Principal Active Global Dividend Income |
(0.63) |
EMLP |
First Trust NA Energy Infrastructure |
(0.56) |
FTSL |
First Trust Senior Loan |
(0.31) |
SRLN |
SPDR Blackstone/GSO Senior Loan |
(0.28) |
AWTM |
Aware Ultra Short Duration Enhanced Inc. |
(0.12) |
POCT |
Innovator S&P 500 Power Buffer-Oct. |
(0.11) |
LRGE |
ClearBridge Large Cap Growth ESG |
(0.10) |
TOTL |
SPDR DoubleLine Total Return Tactical |
(0.09) |
RFDI |
First Trust Riverfront Dynamic Dev. Int'l |
(0.09) |
|
Bottom 10 Total Cash Flow |
(4.17) |
The combination of record cash flows and strong markets resulted in a 75% increase in year-over-year implied active ETF revenue, totaling $611 million. Despite accounting for under 3% of total ETF industry assets, active ETFs now account for over 7% of total industry implied revenue.
Annual Implied ETF Revenue by Asset Category
Spotlight: Q4 2020
The industry saved the best for last, setting a new quarterly cash flow record in Q4 with $23.3 billion. A good reminder of the scale of this: the prior full year cash flow record for the market was $27.4 billion. The maturation of the market outside of Fixed Income was one of the primary reasons why Q4 and 2020 overall were record-breaking. During Q4, non-Fixed Income flows accelerated to $14.9 billion, nearly twice the Q3 2020 record amount. Further, two out of three new dollars into the industry were non-Fixed Income flows.
Quarterly ETF Fund Flows by Asset Class
At the issuer level, the lead story was the continued success of ARK Invest. Its quarter-over-quarter flows increased by $8.5 billion, more than the combined total of its prior nine quarters. Outside of the top five, Innovator ($219 million), Amplify ($298 million), Hartford ($151 million), PGIM ($172 million) and Virtus ($101 million) also had notable quarters.
Top 5 Issuers by Cash Flow Q4 2020
December served as the perfect end to the “Year of Active” with yet another record-smashing accolade: $13.2 billion in monthly cash flow, a total that is more than double than any month on record. The key driver? A collective $8.5 billion into ARK Invest’s five thematic ETFs. What a year!
Active ETF Fund Flows by Months
Bold Predictions for 2021
- Active ETF assets will grow to over $300 billion.
- Active ETF cash flow will surpass 2020 and rise to over $70 billion.
- 5+ issuers will complete Mutual Fund to ETF conversions totaling over $40 billion.
- 25+ semi-transparent ETFs will launch, and assets will grow to over $2.5 billion.
- At least one issuer will eclipse $50 billion in active ETF assets.
Active ETF Stat Pack
| Firms | |||
| # of Issuers | 93 | ||
| # of New Issuers 2020 | 31 | ||
| Products | Assets | ||
| # of ETFs | 474 | AUM ($B) | $172.83 |
| # of New Launches 2020 | 167 | 3 Yr AUM CAGR | 158% |
| Avg. ER | 0.50% | 5 Yr AUM CAGR | 53% |
| Cash Flow | Trading | ||
| YTD Cash Flow ($B) | $60.0 | YTD ADV (Shares) | 37,297,084 |
| 3 Yr Cash Flow | $113.6 | YTD ADV ($) | $1.6 B |
| 5 Yr Cash Flow | $135.6 | YTD Avg. Spread (bps)* | 39.24 |
Source: Factset & NYSE Internal Database and Consolidated Tape Statistics as of 12/31/2020
*Simple average
Active, Semi-Transparent Update
Ticker |
Inception |
Name |
AUM |
Flows |
Avg. Spread (bps) |
ADV (shares) |
Structure |
LMM |
Expense Ratio |
|---|---|---|---|---|---|---|---|---|---|
EQOP |
09/17/2020 |
Natixis U.S. Equity Opportunities ETF |
$11,777,646 |
$240,299 |
14.51 |
5,625 |
NYSE AMS |
Citadel |
0.90% |
VNSE |
09/17/2020 |
Natixis Vaughan Nelson Select ETF |
$6,005,481 |
$269,546 |
15.63 |
3,216 |
NYSE AMS |
Citadel |
0.90% |
VNMC |
09/17/2020 |
Natixis Vaughan Nelson Mid Cap ETF |
$7,723,829 |
$1,650,985 |
23.02 |
3,765 |
NYSE AMS |
Citadel |
0.85% |
ESGA |
07/15/2020 |
American Century Sustainable Equity ETF |
$109,232,730 |
$92,231,255 |
15.02 |
21,805 |
NYSE AMS |
Citadel |
0.39% |
MID |
07/15/2020 |
American Century Mid Cap Growth Impact ETF |
$7,774,695 |
$1,985,690 |
15.28 |
2,000 |
NYSE AMS |
Citadel |
0.45% |
FDG |
04/02/2020 |
American Century Focused Dynamic Growth ETF |
$218,554,602 |
$155,539,037 |
14.91 |
40,009 |
ActiveShares |
Citadel |
0.45% |
FLV |
04/02/2020 |
American Century Focused Large Cap Value ETF |
$170,214,143 |
$147,817,016 |
16.59 |
20,708 |
ActiveShares |
Citadel |
0.42% |
CFCV |
05/28/2020 |
ClearBridge Focus Value ETF |
$3,094,478 |
($332) |
33.21 |
849 |
ActiveShares |
GTS |
0.50% |
FBCG |
06/04/2020 |
Fidelity Blue Chip Growth ETF |
$196,132,625 |
$169,761,103 |
20.98 |
140,624 |
Fidelity Proxy |
GTS |
0.59% |
FBCV |
06/04/2020 |
Fidelity Blue Chip Value ETF |
$42,418,950 |
$37,869,628 |
25.68 |
36,069 |
Fidelity Proxy |
GTS |
0.59% |
FMIL |
06/04/2020 |
Fidelity New Millennium ETF |
$21,692,070 |
$17,716,185 |
25.62 |
18,710 |
Fidelity Proxy |
GTS |
0.59% |
TCHP |
08/05/2020 |
T. Rowe Price Blue Chip Growth ETF |
$63,394,727 |
$46,643,302 |
9.9 |
34,121 |
T Rowe Proxy |
Virtu |
0.57% |
TDVG |
08/05/2020 |
T. Rowe Price Dividend Growth ETF |
$36,429,375 |
$18,900,354 |
6.86 |
10,309 |
T Rowe Proxy |
RBC |
0.50% |
TEQI |
08/05/2020 |
T. Rowe Price Equity Income ETF |
$23,679,417 |
$5,657,302 |
9.89 |
4,576 |
T Rowe Proxy |
Virtu |
0.54% |
TGRW |
08/05/2020 |
T. Rowe Price Growth Stock ETF |
$26,485,533 |
$8,312,211 |
7.85 |
6,270 |
T Rowe Proxy |
RBC |
0.52% |
IVDG |
12/22/2020 |
Invesco Focused Discovery Growth ETF |
$1,200,000 |
$- |
21.8 |
11,181 |
Invesco Model |
Citadel |
0.59% |
IVLC |
12/22/2020 |
Invesco US Large Cap Core ESG ETF |
$1,200,000 |
$- |
16.19 |
2,700 |
Fidelity Proxy |
Citadel |
0.48% |
IVRA |
12/22/2020 |
Invesco Real Assets ESG ETF |
$1,200,000 |
$- |
22.96 |
2,841 |
Fidelity Proxy |
Citadel |
0.59% |
IVSG |
12/22/2020 |
Invesco Select Growth ETF |
$1,200,000 |
$- |
17.65 |
4,995 |
Invesco Model |
Citadel |
0.48% |
|
|
Total/Average |
$949,410,301 |
$704,593,580 |
17.56 |
370,373 |
|
|
0.57% |
Source: Factset & NYSE Internal Database and Consolidated Tape Statistics as of 12/31/2020
*Simple average
December Active ETF Launches
Ticker |
Name |
Issuer |
Launch Date |
Asset Class |
AUM |
|---|---|---|---|---|---|
DECZ |
TrueShares Structured Outcome (December) ETF |
TrueMark Investments |
12/01/2020 |
Equity |
$5,716,395 |
IHYF |
Invesco High Yield Bond Factor ETF |
Invesco |
12/02/2020 |
Fixed Income |
$27,437,425 |
DFAE |
Dimensional Emerging Core Equity Market ETF |
Dimensional Holdings |
12/02/2020 |
Equity |
$5,372,000 |
NVQ |
QRAFT AI-Enhanced US Next Value ETF |
Exchange Traded Concepts |
12/03/2020 |
Equity |
$3,295,625 |
MGMT |
Ballast Small/Mid Cap ETF |
Ballast |
12/03/2020 |
Equity |
$3,307,500 |
FEVR |
Inspire Faithward Large Cap Momentum ESG ETF |
Inspire |
12/08/2020 |
Equity |
$2,281,204 |
GLRY |
Inspire Faithward Mid Cap Momentum ESG ETF |
Inspire |
12/08/2020 |
Equity |
$2,373,147 |
DFHY |
TrimTabs Donoghue Forlines Tactical High Yield ETF Donoghue Forlines Tactical High Yield ETF |
TrimTabs |
12/08/2020 |
Fixed Income |
$77,306,730 |
JSTC |
Adasina Social Justice All Cap Global ETF |
Toroso Investments |
12/10/2020 |
Equity |
$19,967,610 |
AVMU |
Avantis Core Municipal Fixed Income ETF |
American Century Investments |
12/10/2020 |
Fixed Income |
$22,550,400 |
SPCX |
SPAC and New Issue ETF |
Tuttle Tactical Management, LLC |
12/16/2020 |
Equity |
$24,627,325 |
DDEC |
FT Cboe Vest U.S. Equity Deep Buffer ETF - December |
First Trust |
12/21/2020 |
Equity |
$18,222,061 |
FDEC |
FT Cboe Vest U.S. Equity Buffer ETF - December |
First Trust |
12/21/2020 |
Equity |
$24,341,661 |
QDEC |
FT Cboe Vest Growth-100 Buffer ETF - December |
First Trust |
12/21/2020 |
Equity |
$17,984,740 |
YDEC |
FT Cboe Vest International Equity Buffer ETF - December |
First Trust |
12/21/2020 |
Equity |
$4,067,041 |
IVDG |
Invesco Focused Discovery Growth ETF |
Invesco |
12/22/2020 |
Equity |
$120,000 |
IVLC |
Invesco US Large Cap Core ESG ETF |
Invesco |
12/22/2020 |
Equity |
$120,000 |
IVRA |
Invesco Real Assets ESG ETF |
Invesco |
12/22/2020 |
Equity |
$120,000 |
IVSG |
Invesco Select Growth ETF |
Invesco |
12/22/2020 |
Equity |
$120,000 |
HEGD |
Swan Hedged Equity US Large Cap ETF |
Swank Capital LLC |
12/23/2020 |
Equity |
$166,844 |
PSCX |
Pacer Swan SOS Conservative (December) ETF |
Pacer Advisors |
12/23/2020 |
Equity |
$103,796 |
PSFD |
Pacer Swan SOS Flex (December) ETF |
Pacer Advisors |
12/23/2020 |
Equity |
$104,195 |
PSMD |
Pacer Swan SOS Moderate (December) ETF |
Pacer Advisors |
12/23/2020 |
Equity |
$103,967 |
VPOP |
Simplify Volt Pop Culture Disruption ETF |
Simplify Asset Management Inc. |
12/29/2020 |
Equity |
$1,257,260 |
VCAR |
Simplify Volt RoboCar Disruption and Tech ETF |
Simplify Asset Management Inc. |
12/29/2020 |
Equity |
$130,777 |
VCLO |
Simplify Volt Cloud and Cybersecurity Disruption ETF |
Simplify Asset Management Inc. |
12/29/2020 |
Equity |
$1,244,922 |
VFIN |
Simplify Volt Fintech Disruption ETF |
Simplify Asset Management Inc. |
12/29/2020 |
Equity |
$122,200 |
QPT |
AdvisorShares Q Portfolio Blended Allocation ETF |
AdvisorShares |
12/29/2020 |
Asset Allocation |
$1,627,665 |
QPX |
AdvisorShares Q Dynamic Growth ETF |
AdvisorShares |
12/29/2020 |
Asset Allocation |
$1,625,065 |
GSPY |
Gotham Enhanced 500 ETF |
Gotham Asset Management Holdings |
12/29/2020 |
Equity |
$1,994,010 |
KNGS |
UPHOLDINGS Compound Kings ETF |
EMPIRICAL FINANCE LLC |
12/30/2020 |
Equity |
$2,503,800 |
PSFF |
Pacer Swan SOS Fund of Funds ETF |
Pacer Advisors |
12/30/2020 |
Equity |
$2,539,413 |
CBTG |
Cabot Growth ETF |
Cabot |
12/30/2020 |
Equity |
$1,766,233 |
MRAD |
SmartETFs Advertising & Marketing Technology ETF |
Guinness Atkinson Asset Management |
12/31/2020 |
Equity |
$25,000 |
SDEF |
Sound Enhanced Fixed Income ETF |
Toroso Investments |
12/31/2020 |
Fixed Income |
$1,000,000 |
SDEI |
Sound Equity Income ETF |
Toroso Investments |
12/31/2020 |
Equity |
$1,000,000 |
Total |
36 New Active ETFs |
|
|
|
$276,646,009 |
Source: Factset as of 12/31/2020
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