Are advisors missing the opportunity in active fixed-income ETFs?

investmentnews.com:

A recent survey conducted by Capital Group points to a significant gap in understanding the advantages of active fixed-income ETFs among financial professionals, highlighting an opportunity for education and increased adoption in the sector.

The survey, which drew responses from 400 financial professionals, found they are investing less than 4% of managed assets in active fixed-income exchange-traded funds, despite a notable rise in demand for both active ETFs and active fixed-income mutual funds.

“Only 12% of fixed-income ETF assets are active, compared to 78% of fixed income mutual fund assets,” Holly Framsted, Capital group’s head of global product strategy and development, said in a statement.

Many respondents acknowledged their limited familiarity with the unique benefits of active fixed-income ETFs, including the potential for consistent returns, their role as a foundational element in a diversified portfolio, and comparatively low fees.

Travis Spence, J.P. Morgan Asset Management’s head of ETF distribution in EMEA, also recently spoke in favor of active fixed-income ETFs, citing their ability to “allocate towards higher-quality issuers and away from those issuers at risk of downgrades.”

Framsted suggested that the underutilization of active fixed-income ETFs may be a result of this lack of understanding, which she said was “unsurprising” given their recent introduction in the market.

Less than half of the respondents to Capital Group’s survey said they feel very confident in their ability to incorporate active fixed-income ETFs into client portfolios. In contrast, seven in 10 said they were well-versed in the use of active fixed-income mutual funds.

Drilling deeper into the data, the survey found financial