DynamicMarkets

Dynamic Markets, Enduring Goals – A Practical Guide to Using Active ETFs Scott Dennis Sean Kaukas, CFA Managing Director Vice President Head of ETFs U.S. Wealth Management

01 Active ETFs enable adaptation without abandoning long 02 Higher yields are reshaping the role of fixed income from 03 Structural equity themes work best when integrated, term discipline. diversifier to income engine. not isolated. Advisors are increasingly In a post zero rate world, flexible High conviction thematic ETFs using active ETFs to fine tune fixed income strategies can focused on durable value chains duration, credit exposure, and generate meaningful income, like compute infrastructure structural growth positioning. easing the return burden on and capital formation are most This allows portfolios to equities and supporting income effective when sized deliberately respond to evolving markets replacement goals without and embedded within the while preserving core asset sacrificing resilience. core portfolio, supported by allocation integrity. disciplined risk budgeting.

Dynamic Markets, Enduring Goals – A Practical Guide to Using Active ETFs August 2026

Economies and markets are dynamic. Investor goals are comparatively static. That tension, particularly at a time when structural change appears to be accelerating, can feel like a mismatch. In reality, it creates opportunity.

The ability to remain focused on longer-term objectives Under a more traditional model, advisors might establish a while adjusting thoughtfully to intermediate shifts can help strategic allocation, build core equity exposure across style portfolios reach, or surpass, their goals with less friction boxes and regions, and supplement with sector or thematic along the way. The key is having both a durable structure funds. The challenge was generating meaningful impact and implementation tools flexible enough to adapt without without introducing excessive tracking error or destabilizing undermining the core portfolio. the portfolio’s broader anchor. This is where the modern evolution of exchange-traded Today’s active ETFs allow for more precise implementation. funds (ETFs) has become particularly useful. If ETFs Rather than relying on broad sector, factor, or “innovation” were once defined primarily by low-cost access to index buckets, portfolios can access strategies aligned with exposures, their more recent appeal lies in their modularity: specific structural value chains – such as AI infrastructure the ability to adjust duration, credit exposure, or structural or supply chain reconfiguration. In fixed income, flexible growth positioning without abandoning long-term asset strategies can actively manage duration, credit exposure, allocation or materially increasing unintended risk. and sector allocation as conditions evolve.