2024 saw another banner year for active ETF inflows. With uncertainty swirling in the current market environment, investors may want to consider a pair of active funds from Neuberger Berman.
“In 2024, active took in significantly more flows than its initial market share suggested,” FactSet reported. “The difference is called the flows gap.”
In that report, FactSet illustrated the flows gap in a chart that highlighted the difference in both equity and fixed income assets on a percentage basis. Active ETFs garnered a sizable share of flows comparative to market share regarding their vanilla, strategic, and idiosyncratic fund strategy peers.
“Translated into dollars, active equity ETFs pulled in $145 billion, which is $114 billion more than its starting market share would have predicted,” noted FactSet. “Active bond ETFs drew $110 billion, an excess of $16 billion.”
Tame Uncertainty With Active Management
With 2025 already one month old, there’s still a heavy dose of uncertainty circulating in capital markets. A new presidential administration could bring forth policy agendas that could potentially sway the markets one way or another, such as tariffs and taxes.
Furthermore, the Fed could rethink its interest rate policy rather than proceeding further with rate cuts. The economy is still running at peak performance. So the Fed’s plan to guide the economy to a soft landing could take a turn. And Wall Street is already expecting fewer rate cuts than initially anticipated.
“I just don’t see (the Fed) having any confidence right now on how to proceed with rate cuts from here, especially as we await Trump’s tariff and tax policy,” said Peter Boockvar, chief investment officer at Bleakley Financial Group.
Investors looking to get exposure to large-cap equities but want an active component should consider the Neuberger Berman Core Equity ETF (NBCR ). It has a largely sector-neutral portfolio of high-quality companies. In this fund, the portfolio management team at Neuberger Berman screens for large-cap equities that exhibit high quality.
On the growth end of the spectrum, small-cap stocks can offer greater potential upside if the broad market trends higher. Midcaps can provide the best of both large- and small-cap worlds with greater stability as well as growth. In that case, an active option is the Neuberger Berman Small-Mid Cap ETF (NBSM ). Like NBCR, the fund taps into the education and experience of Neuberger Berman’s portfolio management team.
For more news, information, and analysis, visit the Invest Beyond Cash Channel.
