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Actively managed ETFs approaching $1 trillion in assets under management. Our next guest saying investors increasingly turning to actively managed products to navigate the uncertainty in the market. Todd Rosenbluth, TMX VettaFi head of research is here for this week's ETF report brought to you by Invesco QQQ. Todd, great to have you on. I just want to get a sense of what the demand for actively managed ETFs is signaling to you about the market right now and some of the uncertainty that we're seeing.

So you're right, we're approaching $1 trillion in overall US-listed assets in actively managed ETFs. We've seen active ETFs punching above their weight. They're roughly 9% of the overall ETF pie. Uh, they were well above that in 2023 and 2024. They're close to 30% of the flows this year. And what we're seeing is that advisors and investors are turning to active ETFs to both get targeted exposure at the theme and the industry level, as well as broad market exposure. So, we at the exchange conference coming up this weekend, we're going to be talking with some of the active managers from Cohen and Steers and TCW. They're on the more narrowly focused of those actively managed thematic oriented ETFs. We've Sprott that entered the market with an active gold and silver miners ETF, and then the flows are really going into those broader strategies. So, JP Morgan's, JPY and JQ have seen strong inflows. We've seen Capital Group have some success with their dividend value ETF. There's a lot of interest in actively managed ETFs.

So, Todd, what is the first step for investors who have been just enjoying the returns, the double digit returns of the broader markets over the past couple of years and want to get into actively managed ETFs? What's the first step that they should be taking in their education process before getting in?

So, the folks that are mostly interested in actively managed ETFs have been fans of active management for years. So they've long invested in actively managed mutual funds. That's how most of the money in mutual funds is managed. The many folks have moved into the ETF space with lower cost index based products. Now, some of the firms that they've known for years in the active world are here within the ETF world. So I mentioned a couple of those firms. I'll just expand on a couple others. T. Rowe Price and Fidelity have built out a strong lineup. What you want to do is look at who's running the fund, look at the track record of the fund, either the actual ETF that's trading or take a look at if they that same manager is running a mutual fund that may be similar but not exactly the same thing. And then look inside the portfolio. You should see some names that you would expect within the portfolio, but perhaps some names that you might not necessarily expect that you could benefit from that fundamental analysis that the team is bringing to bear. So if it looks too much like an index, then it's too much like an index, and you want the benefits of that active management.

That I find that so interesting, Todd, and I want to focus on the specific type of products and I think we can there's a lot we can understand from the investor where the flows are coming from. For example, I know a lot of those leveraged products that have been day traded might be misunderstood from an education perspective. So that would tell me that there's a lot of flows there that might be a risk on type of mentality or that trading type of mentality, whereas on the other hand, I noticed you mentioned a lot of the active income ETFs, perhaps using option strategies, which give me an indicative of a different type of trader that's more long-term and income-oriented. Do you have any insight onto the flows there or information that retail investors could utilize?

Yeah, so the risk on leverage products, Direxion is one of the leaders within that space. They and ProShares have a long history of offering products, and they continue to build out that lineup of leverage products, either single security or industry oriented products, whereas we're seeing more of the risk off. firms like Calamos and Innovator are a couple of the firms that are newer to offering ETFs that are using options to protect the downside of a portfolio. And then you mentioned income. So JP Morgan's products are the largest within that space, but we have firms like Neos that is a specialist within the options based ETF world that offers uh products like SPY that offers extra income tied to the S&P 500. So there's lots of different ways to be able to add risk, if you're comfortable with that or to protect the downside and generate additional income using ETFs.

All right, Todd, we got to leave it there. Thank you so much for joining us this morning.

Thank you.