Active ETFs, or actively managed exchange-traded funds, are expected to grow more quickly than passively managed ETFs, according to experts at McKinsey & Co. The firm predicts that active ETFs will increase from $10 billion in assets up to $500 billion within the next seven years. A spokesperson for the firm told Pensions & Investments that it’s not a question of, if active ETFs will take off, but when.
They expect the growth of active ETFs to be driven by major brand names like Franklin Resources, Inc. (NYSE:BEN), T. Rowe Price Group, Inc. (NASDAQ:TROW), and Fidelity Investments. Pooneh Baghai, co-leader of the Americas wealth management, asset management and retirement division at McKinsey & Company, Inc., said those three firms and several others are all in the process of getting permission from the Securities and Exchange Commission to begin managing active ETFs.