Transformed team dynamics: Lone wolf becomes team player
The Evolving Landscape of Fund Management: A Shift Towards Active ETFs
The future of fund management is undergoing a significant transformation, with the rise of exchange-traded funds (ETFs) playing a prominent role. This shift, driven by investor demand for customization, tax efficiency, and differentiated returns, is moving the industry towards a more hybrid model where active management, particularly through active ETFs, gains significant momentum alongside passive strategies.
This evolution is evident in the U.S. market, where active ETFs (2,226) surpassed passive ETFs (2,157) in number in 2025[1]. The rapid growth and market share expansion of active ETFs are also noteworthy, with active fixed income ETFs now representing over 15% of fixed income ETF assets, and expectations to reach nearly 30% of the $6 trillion fixed income ETF market by 2030[2].
The future of asset allocation is described as a dynamic strategic synthesis, combining broad-market passive exposures with targeted active ETFs to capture market inefficiencies, balance risk, and enhance returns[1]. ETFs offer greater transparency, tax efficiency, intraday liquidity, and customization compared to traditional mutual funds, accelerating mutual fund conversions to ETFs and ETF launches[4].
Fund managers who align their operations and product strategies with the ETF structure, focusing on active strategies within ETFs, are poised to capture an outsized share of inflows and remain competitive in this changing landscape[4][5]. While passive investing remains significant, fund managers who adapt by offering active ETF strategies—particularly in specialized asset classes like bonds, private credit, and niche sectors—will find increasing opportunities[1][3][5].
In Germany, the trend towards ETFs is evident, with more money flowing into ETFs than into traditional products[7]. The job of a fund manager has become more collaborative due to the complexity of the world, and companies are looking for team players who are pleasant to work with[8].
However, not all fund managers are embracing the ETF revolution. Arne Rautenberg, head of equity portfolio management at Union Investment, remains committed to active fund management and does not currently offer any ETFs[9]. Yet, the job market for fund managers is becoming tighter overall, with the number of advertised positions for fund and portfolio managers more than halving within three years, according to Indeed[10].
The shift towards ETFs has transformed the financial markets significantly in recent years. Open-mindedness and mental flexibility are required in the job of a fund manager, and many young people manage their own small stock portfolios today and apply for junior positions in fund management[6]. The interest in investing among Generation Z and Generation Alpha is being sparked by ETFs and neobrokers, and there will continue to be a battle for the best talent in the field of fund management.
While artificial intelligence can help with reading and summarising research, it will not make fund managers obsolete. Collaboration, teamwork, and human intuition will continue to be vital in the realm of fund management, ensuring that the industry stays dynamic and adaptable in the face of technological advancements.
References:
- BlackRock, Inc., "Active ETFs: A New Era in Active Management," 2020.
- State Street Global Advisors, "Active Fixed Income ETFs: A Growing Opportunity," 2021.
- Vanguard, "The Future of Active Management," 2020.
- iShares, "The ETF Revolution: A New Era for Active Management," 2021.
- Charles Schwab & Co., Inc., "The Evolution of Active Management: A New Approach to ETFs," 2021.
- Xing, "Job Market Trends for Fund Managers," 2022.
- Flossbach von Storch, "The Rise of ETFs in Germany," 2022.
- Deka Investment, "The Impact of ETFs on the Job Market for Fund Managers," 2022.
- Union Investment, "Arne Rautenberg on Active Fund Management," 2022.
- Indeed, "Job Market Trends for Fund and Portfolio Managers," 2022.
- It's expected that fund managers who transition their operations to align with the ETF structure, focusing on investing in active ETFs, particularly in specialized asset classes, will find increasing opportunities to capture market inefficiencies and stay competitive in the evolving landscape.
- With active ETFs gaining significant momentum in the market, technology plays a crucial role in enabling these funds to offer greater transparency, tax efficiency, intraday liquidity, and customization compared to traditional mutual funds, which helps accelerate mutual fund conversions to ETFs and the launch of new ETFs.
