4 Promising Active ETFs

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

1. Jensen Quality Growth JGRW
2. PGIM Jennison Focused Growth PJFG
3. JPMorgan International Growth JIG
4. 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.