What strategies do active ETFs pursue?

Active strategies can have different objectives. At our partner J.P. Morgan Asset Management, the Research Enhanced Index ETFs are “index-aware” active strategies. Here, both the active risk and the tracking error are limited. The ETFs are active, but the portfolio management deliberately remains very close to the benchmark in terms of regions, sectors and styles, so that the portfolio looks like the index from a bird’s eye view. The deviations from the benchmark are based on J.P. Morgan Asset Management’s fundamental research at individual stock level. The deviation per security is significantly smaller compared to active strategies with higher active risk and higher tracking error, which then deviate significantly more from the benchmark.