How to know if actively managed exchange-traded funds are right for your portfolio

Exchange-traded funds are often associated with passive strategies. But money has also poured into the actively managed version of ETFs, as investors crave more precision, experts say.

While passively managed ETFs aim to replicate an index, such as the S&P 500,active managers are more hands-on, trying to outperform a specific benchmark.

Active ETF managers may routinely “check under the hood” with a process-based approach, said certified financial planner Jon Ulin, managing principal of Ulin & Co. Wealth Management in Boca Raton, Florida.

Actively managed U.S. ETFs jumped to nearly $275 billion in net assets in September, up from about $140 billion the previous year, according to Morningstar data, making up just over 4% of the overall U.S. ETF market.