In New York City, investors are turning their attention to actively managed stock ETFs that offer a unique approach to investment. These ETFs, known as factor or smart beta investments, have been gaining popularity due to their outstanding performance compared to their passive counterparts.

Initially, six actively managed stock ETFs were highlighted for their exceptional performance, with five out of the six outperforming their respective matched investment categories. However, one of the original six ETFs had to be shut down due to insufficient assets accumulated since its inception, while three new actively managed bonds ETFs were introduced.

Factor-based investments have seen significant growth globally, with market share exceeding 20%. These investments are now considered mainstream, providing investors with access to factors that can deliver additional returns over longer time periods. The assets under management for factor-based investments have surged from $193 billion in 2014 to $2,517.5 billion as of May this year.

Investors are increasingly including factor funds in their portfolios, drawn to the potential for enhanced returns. Vanguard’s factor stock ETFs, in particular, have consistently outperformed their comparison indices, making them attractive options for long-term investors.

Comparisons between Vanguard and Fidelity factor stock ETFs have revealed varying performances across different categories. While some Vanguard ETFs have shown better short-term results, Fidelity ETFs may be more suitable for long-term investors. Ultimately, the majority of these funds have demonstrated stronger returns than investing in their comparable indices, making factor ETFs an appealing choice for investors seeking alpha in their portfolios.