ETFs Are 'Absolutely' Mainstream: Maier

Summary

JPMorgan’s Jon Maier explains that active ETFs are now mainstream, with active fixed income leading flows. He specifically highlights JPRF as a low-duration preferred ETF that outperforms passive peers and fits extended fixed income allocations. Co-host Eric Balchunas pushes back by arguing that SGOV’s risk-free 3.8% yield makes cash-like T-bills more attractive than active bonds until yields fall. The conversation also touches on thematic ETFs, leveraged ETF risks, and model portfolio distribution.

• Active ETF launches reached 86% of all new launches, with $58 billion in July flows, signaling mainstream adoption
• Jon Maier highlights JPRF, a JPMorgan preferred ETF with 4.8 duration, as a strong way to outperform passive fixed income peers
• Eric Balchunas defends cash positions in SGOV, citing a 3.8% risk-free yield and the failure of aggregate bond ETFs to hedge equity downturns
• Maier notes active fixed income managers can outperform by accessing securitized and off-benchmark parts of the market
• Model portfolios are a key driver of ETF flows, offering sticky assets and institutional-style allocation for retail investors
• Thematic ETFs remain popular but Maier argues active stock selection based on fundamentals is superior to thematic index rules
• Leveraged ETFs are discussed as short-term trading instruments with significant compounding risks for longer holding periods