Schroders and M&G stake claims to active ETF space

The exchange-traded fund (ETF) space is one of the fastest growing areas of investing, with over 1 million new investors in the category added since 2022.

ETFs are a type of fund which is listed on an exchange such as the NYSE and bought and sold in the same way as a stock. Originally created as a way to gain passive exposure to an index, they have now become vehicles for a wider range of strategies and asset classes.

The active ETF space, where the holdings of an ETF are selected by a manager in order to try to try to generate excess returns while still providing liquid and low-cost access, is one of the fastest growing areas.

This week saw Schroders appoint its first Head of ETFs, Tom Stephens, signalling its goal of bringing its “active edge” investing to a wider range of investors. The manager launched its first two active ETFs earlier this year.

Tom joins from JP Morgan Asset Management, where he spent eight years heading up ETF capital markets. He will build and execute Schroders’ global ETF strategy, including client experience, product, infrastructure and distribution.

Matt Oomen, Global Head of Client Group, Schroders, said: “Our recent European active ETF launches will enable us to reach more investors than ever before, and Tom’s deep knowledge and experience of the ETF market will help marry our growing capabilities with increasing client interest.”

This week also saw M&G Investments launch a range of active ETFs.

Joseph Pinto, Chief Executive of M&G Investments, says: “This is a strategic milestone for M&G as we bring our active management expertise into the ETF space with scale, combining precision portfolio construction with accessibility and efficiency for investors.

“Our longstanding track record in delivering alpha through disciplined, research-driven strategies makes us uniquely positioned to translate decades of active management expertise into the active ETF structure. We’re entering the market with conviction, with strategies that are unconstrained by benchmarks and built to navigate complexity.”

Meanwhile, in a sign of the breadth of assets that ETFs offer access to, Vanguard announced this week that ETFs containing cryptocurrencies such as bitcoin can now be traded on its platform.

This video from BlackRock features more ETF insights from the firm’s recent ‘People and Money’ research.