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As the investment climate seesaws on a resurgence of Covid-19 cases and unreliable company earnings, investors are favouring active exchange traded funds (ETFs). Active ETF assets grew 46% to reach $4.9 billion in the year to the end of June, according to Rainmaker Information (publisher of Money), compared with a 23% increase in ETFs that use a market-cap index.

Active ETFs appeal to investors who believe that fund managers have an ability to outperform the benchmark index by picking shares or fixed-income securities, sectors and weightings.

“Active ETFs can be selective about what they invest in, which brings with it the potential to outperform the broader market, as they don’t have to hold every security in the index or market,” says Matt Gaden, head of Australia at Janus Henderson

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