10 Best Actively Managed ETFs Of May 2024

It’s exciting to see an actively managed ETF like Avantis U.S. Equity ETF with rock-bottom fees. Investing in U.S. large-, mid- and small-cap stocks that managers expect to outperform, this fund is a core holding candidate for your portfolio. It aims to own stocks that combine high profits with lower valuations, for long-term capital appreciation and category-beating performance

AVUS owns about 2,300 companies, giving it solid diversification. Its top-10 holdings make up about 20% of the portfolio. Technology stocks are the largest sector, followed by financials, consumer cyclicals and industrials.

AVUS, which debuted in 2019, outperformed its Morningstar large-cap blend category average and the broad stock market in the form of the S&P 500 Index over the past three years. Time will tell if it can consistently top those benchmarks over extended periods. So far, AVUS has delivered attractive valuations.

The Dimensional US High Profitability ETF has been around only since early 2022, but its holdings’ earnings per share growth and sales growth both top of its peer group’s averages.

DUHP is attractively valued. Its expense ratio is less than one-third of its peer group’s average. Similarly, the fund’s price-to-earnings ratio is lower than its category average and that of the S&P 500. All of these factors suggest that DUHP is poised for continued strong performance.

The PIMCO Enhanced Short Maturity Active ESG fund is an active ETF designed for sustainability-focused investors who also want high cash-equivalent yields. Check out the fund’s low, low average effective duration of about four months. That means your principal investment is unlikely to decline in price more than 0.32% when interest rates increase 1%—and vice versa.

This short-term bond ETF offers an interesting mix of both U.S. and international debt. EMNT’s roughly 200 holdings are diversified across corporate, securitized and cash equivalent fixed income instruments. It’s almost all investment grade with a big chunk in top-notch AAA rated securities.

Bottom line: This is a fund for anyone who wants decent yield from a stable fund packed with high credit quality bonds, which meet ESG criteria. It’s like a sustainability focused money market mutual fund with a little more growth potential.

The Invesco Russell 1000 Dynamic Multifactor ETF invests at least 80% of its money in stocks included in the Russell 1000 Invesco Dynamic Multifactor Index. So why do we include OMFL in our list of actively managed funds? Because of what OMFL does with the balance of its shareholders’ cash. That portion of OMFL’s portfolio is actively run, and the fund outperformed its Morningstar large-cap blend category as well as the S&P 500 Index over the past three and five years. As a result, we’re including OMFL on our list of Best Actively Managed ETFs.

OMFL’s personality, not to mention its performance, is based on the interplay between the economic environment and factors specific to its holdings. The fund’s ultimate goal is to be invested in the best performing companies during each economic cycle. Identifying those stocks in advance is the stock picker’s art.

Right now, OMFL has pluralities of mid-cap value and mid-cap core stocks. Across its more than 700 holdings, the fund’s biggest sectors include traditional value stock strongholds : financials, industrials and consumer discretionary. But technology is another sector stronghold for OMFL.

International stocks can outperform their U.S. counterparts for extended stretches—as they have over the past 12 months. You can diversify your portfolio with foreign stock exposure by owning the Avantis International Small Cap Value ETF.

Using active management, AVDV targets small-cap firms in developed markets. Fund managers also resort to limited indexing for the sake of diversification, low turnover and transparency of exposures. Nevertheless, the beating heart of this fund is human stock picking. It aims for efficient management and a trading process that aims to enhance returns while minimizing risks and costs.

AVDV’s biggest geographic allocation is to Japan. Its next largest allocations are to the U.K., Canada, Australia and Sweden. The fund, which debuted in 2019, has outperformed its Morningstar category’s average annual returnover the past three years. Just note that this fund is best for patient investors, as the foreign small-cap value class swings in and out of favor.

Bonds are tricky assets to analyze. That enables the best bond pickers to shine. And while recent years have been tough for bond fund managers, the VictoryShares Core Intermediate Bond ETF has beaten its Morningstar category average over the past one, three and five years—albeit sometimes by losing less ground than its direct rivals.

UITB employs bottom-up analysis to uncover the best government, corporate, mortgage, agency and high-yield debt. In a no pain-no gain world, the fund’s outperformance may well be due to its allocation of about 23% to BBB bonds—among the riskiest investment grade debt—and otherwise overall smart bond choices.

The fund’s current average effective duration of about six years suggests that if interest rates increase by 1%, the fund’s value will decline by roughly 6%. On the other hand, when interest rates begin their descent, UITB will appreciate.

Like Invesco’s OMFL, the Motley Fool 100 ETF cooks up outperformance by letting savvy stock-picking managers spice up a core of index-dictated holdings. Their recipe? Managers buy the top 100 largest U.S. companies recommended by The Motley Fool. They’re all fast growers with competitive advantages, strong balance sheets, high profit margins and sound returns on capital.

Think of TMFC as an index with pizzazz. Results testify to that. Over the past five years, the fund’s returns have outperformed the broad market average as well as its large-cap growth Morningstar category. Currently, tech is the biggest allocation by far. Telecommunications and consumer discretionary stocks are the next largest sectors.

The PIMCO Active Bond ETF is an actively traded fixed-income fund designed for income investors. It strives to outperform its passively managed intermediate bond ETF competitors. Over the past 10 years, that’s precisely what it has done on an average annual return basis. Likewise, the fund’s current dividend yield beats its Morningstar intermediate core-plus bond fund category average.

BOND seeks higher-quality, intermediate-term bonds. Its 10-year average annual outperformance is a testament to its ability to weather various market environments. The portfolio holds more than 1,000 bonds with an average effective duration of about 6 years. BOND posts an estimated yield to maturity of about 6.4%. Roughly 65% of the bonds are AAA credit rated.

The Cambria Foreign Shareholder Yield ETF likes companies with strong dividends and stock buybacks . The fund also screens for value factors such as low debt ratios. And it aims for stocks with consistent profitability, solid growth and sound balance sheets. Best of all, the fund’s expense ratio is far below its Morningstar category’s average.

FYLD’s portfolio tilts toward smaller, value-oriented international companies. Holdings tend to have greater yield and momentum as well as more so-called quality traits, such as net debt paydown, than the fund’s peers. If buying this ETF in a taxable account, be aware of its 34% turnover and high dividend yield . For those seeking international exposure and cash flow, the roughly 100 holdings pay enviable quarterly dividends.

The Fidelity Blue Chip Growth ETF has a 24-carat gold pedigree. It is the ETF clone of its older mutual fund stablemate, FBGRX, which is the 20th best performing fund in its Morningstar large-cap category over the past 15 years. Better yet, the ETF version has a lower annual expense ratio.

FBCG strives for long-term capital growth by investing up to 80% of its assets in blue chip stocks that Fidelity’s management team believes have above-average growth potential. These growth companies should soar when conditions are favorable, but they can lag when value-oriented stocks rule the roost.

The biggest bets among FBCG’s roughly 170 holdings are in the technology sector. Consumer discretionary stocks, telecom and healthcare are FBCG’s next biggest sectors. Growth investors who are comfortable with higher than average volatility should consider the potential for stellar long-term principal appreciation offered by FBCG.