Market Overview

A New Active ETF From Guggenheim

A New Active ETF From Guggenheim

The actively managed space of the exchange-traded funds business remains a small piece of what is a growing industry, but one area where active ETFs have grabbed a foothold is fixed income. As of mid-January, actively managed ETFs trading in the United States had just over $23 billion in assets under management— peanuts relative to the well over $2 trillion in combined U.S. ETF assets under management.

Guggenheim, the eighth-largest U.S. ETF issuer, is looking to expand its actively managed ETF presence with Wednesday's launch of the Guggenheim Total Return Bond ETF (NYSE: GTO).

Total Return Bond ETFs And GTO

Total return bond ETFs are already among the most popular active ETFs thanks in large part to PIMCO ETF Trust (NYSE: BOND) and the SPDR DoubleLine Total Return Tactical ETF (NYSE: TOTL).

BOND and TOTL rose to rapid prominence due in large part to the all-star managers behind those funds. When BOND came to market, it had the benefit of being known as the “Bill Gross ETF” because Gross was still at PIMCO. TOTL is managed by Jeff Gundlach's DoubleLine Capital and Gundlach is probably the person currently wearing the bond king crown.

Related Link: REIT ETF Dividends Are Hanging Tough

While GTO does not come to market with big-name managers, the actively managed ETF is run by the same team that manages Guggenheim Total Return Bond Fund (GIBIX), which is rated five stars by Morningstar and is in the top 1 percent of its Morningstar intermediate-term bond peer group for the trailing three-year period.

That is an impressive track record and GTO has another way of competing with its rivals: A lower expense ratio. The new Guggenheim ETF charges 0.5 percent per year, or $50 for each $10,000 invested. That is lower than the 0.55 percent charged by TOTL and the 0.57 percent annual fee on BOND.

GTO Joins The Ranks

GTO is not Guggenheim's first actively managed ETF. The Guggenheim Enhanced Short Duration ETF (NYSE: GSY), which debuted eight years ago, has $682.3 million in assets under management.

GSY is Morningstar’s highest-ranked (top 1 percent) ultra-short bond ETF for the trailing one-, three- and five-year periods.

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