Russel Kinnel: Active ETFs are growing rapidly, but most of the growth has been in a small group of funds. Today, I’d like to highlight four excellent active ETFs that have less than 200 million in assets. Each one has a mutual fund counterpart, but the ETF is cheaper and should be more tax-efficient.
4 Promising Active ETFs
- Jensen Quality Growth JGRW
- PGIM Jennison Focused Growth PJFG
- JPMorgan International Growth JIG
- Neuberger Berman Small Mid NBSM
Jensen Quality Growth JGRW is an excellent vehicle investing in wide-moat stocks, but it has only 68 million in assets. A fund looks for quality companies that will endure, and it holds up well in bear markets. A fund has been very consistent in both strategy and performance. I actually own the open-end version.
If you want faster-growing companies, consider PGIM Jennison Focused Growth PJFG, a fund with just 136 million in assets. This is a more focused version of Harbor Capital Appreciation, which I actually own in my 401(k). Natasha Kuhlkin is the lead manager here, but she has the support of a deep team of analysts and managers from Jennison. The fund is a concentrated portfolio of 30 fast-growing names. Expect much more volatility than the fairly placid Jensen Quality Growth.
JPMorgan International Growth JIG is a Silver-rated foreign large-growth fund with just 139 million in assets. Shane Duffy runs a fairly diversified growth portfolio that emphasizes steady growers. The portfolio is led by Taiwan Semiconductor, Safran, and Tencent.
We’re seeing more small and mid-cap active ETFs get launched as fund companies get more comfortable with liquidity issues. One of the best of that new group is Silver-rated Neuberger Berman Small Mid NBSM. Management looks for high-quality companies with low debt levels and high returns on equity. The fund has just 170 million in assets, but its sister fund on the open-end side has $15 billion. The fund straddles the line between small and mid and blend and growth, less at the smaller end of small caps for liquidity reasons. Compared with mid-growth funds, it has less in tech and more in cyclicals.
Watch Holy Smokes! These Funds Could Get Barbecued for more from Russel Kinnel.