To The Moon

Much has been written about the spectacular ascent of the JPMorgan Equity Premium Income ETF (JEPI). A mere three years after launch, JEPI is the largest actively managed U.S.-listed exchange-traded fund, with assets under management of $25.5 billion, up from $17.5 billion at the start of the year. 

The rapid growth of JEPI, which combines a covered call strategy with a low volatility value strategy, is indicative of the breakout year that active ETFs in general are having. 

Despite managing only 5.7% of all U.S.-listed ETF assets—$400 billion out of nearly $7 trillion—active ETFs have gathered nearly a third of this year’s inflows. 

What was once a small corner of the ETF market is increasingly being embraced by investors. And it’s not just JEPI; a number of active ETFs are seeing strong demand from investors this year, with 23 of them having registered year-to-date inflows of $500 million or more. 

I’ll run down a few of them and then you’ll find a table of all 23 at the bottom of this page. 

Dimensional US Core Equity 2 ETF (DFAC)  $Dimensional U.S. Core Equity 2 ETF(DFAC)$
 
The Dimensional US Core Equity 2 ETF (DFAC) is the most popular ETF from Dimensional Fund Advisors, the largest manager of active ETFs. Dimensional currently has 30 active ETFs with combined assets under management of $85 billion. 

DFAC, which has seen inflows of $1.8 billion this year, is a broad U.S. equity ETF with nearly 2,700 holdings. It was originally a mutual fund that was converted into an ETF in 2021. Since then, assets in the fund have continued to grow as it has outperformed index-based peers like the Vanguard Total Stock Market ETF (VTI). 

JPMorgan Nasdaq Equity Premium Income ETF (JEPQ)  $J.P. MORGAN NASDAQ EQUITY PREMIUM INCOME ETF(JEPQ)$
 
The JPMorgan Nasdaq Equity Premium Income ETF (JEPQ) is the Nasdaq-100 version of JEPI. It has the same hybrid strategy as its sister ETF, whereby it generates income by selling covered calls and tries to generate alpha by purchasing undervalued stocks with low volatility. 

While not as popular as the S&P 500 version of the strategy, JEPQ is still an impressive fund, having gathered $1.4 billion of inflows this year. Total AUM in the ETF now stands at $2.6 billion. 

Fidelity Total Bond ETF (FBND)  $Fidelity Total Bond ETF(FBND)$

The Fidelity Total Bond ETF (FBND) is one of Fidelity’s first active ETFs. It was launched in 2014 and is essentially the ETF version of the Fidelity Total Bond Fund (FTBFX), which is a mutual fund.  

Both funds have the same managers and track each other closely.  

Though FBND only has a fraction of the assets of its mutual fund counterpart—$3.9 billion versus $30.6 billion—it’s been growing quickly. 

Its returns have been in line with the passively managed Vanguard Total Bond Market ETF (BND) and the iShares Core U.S. Aggregate Bond ETF (AGG) over the past year, but it has sharply outperformed over the past five years, with a return of 10% versus 6%. 

JPMorgan Ultra-Short Income ETF (JPST)  $JPMorgan Ultra-Short Income ETF(JPST)$

The JPMorgan Ultra-Short Income ETF (JPST) was the largest actively managed ETF until it was recently passed by JEPI. 

But JPST is no slouch. It’s picked up $943 million of new assets this year thanks to the strong demand for short-term yield. 

With the fed funds rate currently hovering above 5%, this is the ideal time for investors to generate high yields with little to no risk. Typically, JPST offers slightly higher returns than Treasury-only ultra-short income ETFs because it takes on more risk by purchasing things like commercial paper.  

This year, that extra risk hasn’t added anything to investors’ gains. JPST has returned just as much as the iShares 0-3 Month Treasury Bond ETF (SGOV). But longer term, that additional risk has paid off, providing investors in JPST a few extra percentage points of return.  

Most Popular Active ETFs of the Year 

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