Actively managed ETF

An actively managed ETF is an exchange traded fund where a portfolio manager selects and adjusts holdings based on research and judgment, rather than simply replicating a fixed index. It trades on an exchange throughout the day like any other ETF, but its portfolio changes over time as the manager buys and sells positions to try to beat a benchmark rather than match it.

Most ETFs are passive, built to track an index such as the S&P 500 at the lowest possible cost. Actively managed ETFs instead compete with actively managed mutual funds, offering the same kind of manager driven stock picking but wrapped in the ETF structure, which typically brings lower costs and the ability to buy or sell shares at any point during market hours instead of only at the end of day price.

Because the manager is making ongoing decisions rather than tracking a published index, actively managed ETFs charge higher expense ratios than plain index ETFs, though usually less than comparable mutual funds. Some actively managed ETFs disclose their full holdings every day like a normal ETF, while others use a semi-transparent active ETF structure that reveals holdings less frequently to protect the manager's strategy from being copied by other traders.