Beyond the index: how active ETFs offer adaptability in volatile markets

If you have been investing in index funds and feeling quietly confident about it, this episode might give you pause. The passive investing playbook has served a lot of people well over the past decade, but the market it was built for looks quite different from the one we are navigating now. Concentration risk is higher than most investors realise, and simply tracking the index may no longer mean what people think it means.

In this episode of Money Hacks a podcast from The Business Times, Howie Lim is joined by Charu Chanana from Saxo and Darrin Ng from Phillip Securities to dig into the rise of active ETFs, why investors are increasingly willing to pay a little more for flexibility, and what the pitfalls look like if you make the switch without thinking it through.

Why listen

• Why the S&P 500 is less diversified than you probably think The top 10 stocks account for nearly 40 per cent of the index, double what it used to be. Both guests explain what that concentration actually means for your portfolio in a volatile year.

• What you are really paying for with an active ETF The fee difference between passive and active is roughly 0.5 per cent to 1 per cent a year. Ng breaks down whether that buys you performance, flexibility or something else entirely.

• Why passive does not mean safe One of the most useful reframes in this episode. Passive investing follows the benchmark wherever it goes, including into crowded, overvalued territory.

• The pitfalls of going active without a clear reason Switching for the sake of it is its own kind of trap. Both guests are candid about where active strategies can go wrong.

The goal is not necessarily to choose one over the other. The experts tell you it’s to be more intentional about how you use both to understand what that means; Listen now.

Money Hacks is the flagship personal finance podcast from The Business Times. Catch past episodes at bt.sg/podcasts. Have a burning question or episode idea? Email the team at btpodcasts@sph.com.sg.

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Written and hosted by: Howie Lim (howielim@sph.com.sg)

With Charu Chanana, chief investment strategist, Saxo Bank; and Darrin Ng, assistant manager, dealing, global markets desk, Phillip Securities

Edited by: Howie Lim & Claressa Monteiro

Produced by: Howie Lim & Chai Pei Chieh

A podcast by BT Podcasts, The Business Times, SPH Media

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Do note: This podcast is meant to provide general information only. SPH Media accepts no liability for loss arising from any reliance on the podcast or use of third party’s products and services. Please consult professional advisors for independent advice. 

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