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In the previous article, we learned that ETF products that are actively managed by fund managers and aim to obtain excess returns are called active ETFs. So what are the categories of active ETFs?

We can classify from different perspectives such as asset class, investment strategy, transparency, etc.

According to asset categories, active ETFs can be divided into equity, bond, commodity, currency, and other types, etc.

As the name implies, just like the classification of ordinary funds, equity-based active ETFs mainly invest in stocks, bond-based active ETFs mainly invest in bonds, and so on. Currently, global active ETFs are mainly equity and bond-based, with equity accounting for more than 50% and bond accounting for nearly 40%.

According to the activeness of the strategy, active ETFs can also be divided into index-enhanced ETFs and fully actively managed ETFs.

At the beginning of the development of the overseas active ETF market, index-enhanced ETFs were the main focus. Currently, all active ETFs in my country are also index-enhanced ETFs. This type of product integrates active management strategies into the management of passive index ETFs, and strives to obtain excess returns on the basis of tracking index returns to increase investment returns. Later, as the products continued to develop, investment strategies and investment scope gradually expanded, and fully actively managed ETFs emerged, just like the actively managed stock funds, bond funds, etc. that we usually see, but they are operated with the ETF product structure and can be flexibly traded in the secondary market.

Based on the level of transparency, active ETFs can be divided into three categories: transparent, semi-transparent and opaque.

Transparent active ETFs are easy to understand. Like other ordinary ETFs, they will disclose their holdings through the daily public ETF subscription and redemption list. Semi-transparent and opaque active ETFs are mainly to solve the problem of strategy being parsed and copied and "free-riding". They maintain a certain degree of opacity in holdings and reduce the frequency of disclosing holdings.

Specifically, semi-transparent active ETFs disclose proxy portfolios and their overlap with actual portfolios on a daily basis, and disclose completely true holdings on a monthly or quarterly basis. This proxy portfolio uses algorithms to randomly confuse stock weights, add some fictitious holdings, and use ETFs and cash to replace some weights based on real holdings to obscure actual holdings. In short, this product partially discloses and partially hides the real holdings, so it is called a semi-transparent active ETF.

For opaque active ETFs, only designated representative agencies that provide subscription and redemption services can obtain complete holdings. Customers subscribe and redeem in cash through the representative agencies, and the fund publicly discloses its true holdings every quarter. Therefore, it is called an "opaque" active ETF.

After understanding what active ETFs are and what categories they are classified into, the next step is to take a closer look at the development of active ETFs in my country and the characteristics of the current mainstream product - index-enhanced ETFs.

Note: The relevant materials are for reference only and do not constitute fund promotion or investment advice. E Fund Management will not assume any responsibility for the consequences caused by your company's use of such materials.