Mark Noble, SVP, Horizons ETFs has been one of the ETF Industry's most adamant and well-informed advocates that Active ETFs will take a significant share of what has been a mostly passive landscape for investing options for investors.
We chatted with Mark Noble at the Inside ETFs Canada Conference in Montreal about the rise of Active ETFs, and much more.
"I think this is the year of active management. I think I've been saying that for about three years now," says Noble. "This year, it's really taken off. When we talk about active management, we talk about Canada being a leader in active ETFs. There are about $80-billion globally in active ETF assets, and Canada represents about $30-billion of that, so a huge piece of the pie; so massive disproportion relative to the rest of the market."
"What's important to understand is that some of the number is fudged in that the way that we categorize Active ETFs from a methodology standpoint is an ETF not following an index. There are some extremely large ETFs in Canada that are technically passive strategies, but because they do not follow a well-defined index, they're classified in that "active" bucket. It's probably closer to $15-billion."
"That said, over the last year, [there's been] just a massive amount of new providers coming into the marketplace, that are really doing true active management," said Noble. "So now we're talking about portfolio managers seeking to beat the market, per se, or generate better risk adjusted returns, in an ETF package."
Noble says this has come about as a result of the large incumbent Canadian mutual fund issuers traditional mutual funds being outsold by ETFs, by a margin of two to one over the past number of years.
Noble has advocated the development of active ETFs, as seen through the Canadian lens, as Canada's capital markets are not as deep, and liquid, and efficient as that of the U.S. markets, where indexing, passive investing have thrived.
We also went on to talk about Canada's fixed income market, the Marijuana sector, the advent of Artificial Intelligence, Blockchain, and how ETFs are making many of these areas of opportunity more available to investors.
It was an exciting, and informative conversation.
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