TY - JOUR T1 - Risk-Adjusted Performance of the Largest Active ETFs JF - The Journal of Wealth Management SP - 52 LP - 63 DO - 10.3905/jwm.2017.20.3.052 VL - 20 IS - 3 AU - Kristine L. Beck AU - James Chong AU - G. Michael Phillips Y1 - 2017/10/31 UR - https://pm-research.com/content/20/3/52.abstract N2 - This study examines the performance of the 10 largest active exchange-traded funds. Using Jensen’s alpha, 50% of the largest active ETFs underperform their passive benchmarks, for both default and specific indexes. This implies that active ETFs are not appropriate as stand-alone investments. On the other hand, as part of a portfolio consisting of an active ETF, a benchmark index, and a risk-free asset, active ETFs play an integral role in the outperformance of the portfolio over the benchmark. This suggests that, for the purposes of enhanced risk-adjusted performance, active ETFs are better suited in a portfolio setting.TOPICS: Exchange-traded funds and applications, performance measurement ER -