Actively managed ETFs continued to gain traction in July with $24 billion of net inflows. This represented 19% of the industry’s net inflows, which remains impressive given the 7% share of the assets. However, last month’s most popular ETF will surprise you.
Six of the ten most popular active ETFs in July were fixed income products. Taxable bond funds like the Fidelity Total Bond ETF (FBND ) and the Janus Henderson AAA CLO ETF (JAAA ) continued to gain traction. Yet, the Capital Group Municipal Income ETF (CGMU ) gathered even more, adding $1.3 billion of new money more than doubling in size.
Capital Group’s ETF More Popular than iShares and Vanguard in July
The fund has $2.2 billion in assets, making CGMU the second largest actively managed municipal bond ETF. The JPMorgan Ultra-Short Municipal Income ETF (JMST ) has $2.8 billion in assets. JMST is a multi-state fund with an average duration of less than one year.
See related: Popular Active Bond ETFs
CGMU is also Capital Group’s second largest fixed income ETF offering. The Capital Group Core Plus Income (CGCP ) recently had $2.9 billion. Capital Group’s four largest active ETFs were equity products.
The municipal bond ETF launched in late 2022 as a multi-state, primarily investment-grade bond fund. The active fund invests mostly in revenue bonds issued from states like California, New York, Illinois, and Texas.
Other Established Municipal Bond ETFs
The recent demand for the Capital Group municipal bond ETF was stronger than it was for larger peers. The iShares National Muni Bond ETF (MUB ) and the Vanguard Tax-Exempt Bond ETF (VTEB ) combined added just under $950 million combined in July. These index-based municipal bonds continue to gain traction. Yet it is encouraging to see there is interest in funds built based on proprietary fundamental credit and spread analysis.
There are other widely owned active municipal ETFs. The list includes the AB Tax Aware Short Duration Municipal Bond ETF (TAFI ), the Dimensional National Muni Bond ETF (DFNM ) and the PIMCO Muni Intermediate Bond Active ETF (MUNI ).
Goldman Sachs and T. Rowe Price Bring Expertise to ETF Market
In July 2024, Goldman Sachs and T Rowe Price expanded their ETF lineups with municipal bond offerings. The Goldman Sachs Municipal Income ETF (GMUB ) is the core fund of the quartet providing multi-state exposure through intermediate-term bonds. The Goldman Sachs Ultra Short Municipal Income ETF (GUMI ) offers a less-rate sensitive option for investors. The fund aims for an average duration of less than one year.
Meanwhile, the Goldman Sachs Dynamic New York Municipal Income ETF (GMNY ) and the Goldman Sachs Dynamic California Municipal Income ETF (GCAL ) offer state-specific exposure. In 2023, the Goldman Sachs Community Municipal Bond ETF (GMUN ) is a more targeted ETF focuses on bonds tied to initiatives such as education and health care.
T. Rowe Price’s seven largest ETFs are all equity focused. However, they too have been building out their fixed income offerings. The T. Rowe Price Intermediate Municipal Income ETF (TAXE ) joins the taxable T. Rowe Price Total Return ETF (TOTR ) and a handful of others.
Both Goldman Sachs and T. Rowe Price have a strong heritage offering actively managed municipal bond strategies. However, these were available in mutual fund form and not as an ETF. Many advisors and end investors have made it clear that they prefer the liquidity, tax efficiency and cost effectiveness of ETFs. I’m excited to watch these funds grow.
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