Active ETFs vs managed funds: the art of selling without self-sabotage

As active ETFs gain traction across the Asia-Pacific region, asset managers increasingly find themselves promoting two versions of the same strategy: the traditional managed fund and the newer active ETF. While this approach meets evolving investor needs, it also creates a clear marketing challenge: How do you differentiate the products without blurring their value or cannibalising demand?

Across Fundamental Media’s work with asset managers in Australia and Asia, one theme is consistent: the most successful firms treat this as a strategic communication architecture problem, not a product problem. Strong differentiation, clarity of purpose and insight-led storytelling allow both wrappers to achieve their intended roles.

What advisers want and why it matters for advertising

Our Australian Financial Intermediaries Research 2025 shows that advisers are not looking for wrapper-first messaging. Their top priority is market trends and analysis, followed by information they can easily extract, digest and relay to clients. This means the first touchpoint of any campaign should be insight-led, not product-led.

Advisers increasingly use active ETFs in ways that go beyond traditional passive exposures. While cost and liquidity matter, many are seeking niche strategies, tactical tools, satellite exposures, or replacements for certain mutual funds. Managed funds still play important roles around access to specialist capabilities, scale, and specific platform or client needs.

Advertising must therefore make the distinct role of each wrapper obvious, rather than allowing them to compete silently for the same adviser attention.

Why cannibalisation happens

Cannibalisation rarely stems from the strategy itself. Instead, it emerges from unclear or identical marketing. Common pitfalls include:

• Similar-looking ads for both products
• Fee-driven messaging that steers interest toward the cheaper wrapper
• Undifferentiated product pages
• Simultaneous campaigns aimed at the same audience with overlapping narratives

The firms that get this right develop unique messaging, value propositions and use cases for each wrapper. Advertising becomes a tool that helps advisers choose the right option for the right client, not a competition between products.

Five strategic imperatives for marketing multiple vehicles

1. Strategic authenticity

Investors and intermediaries will always ask: Why are you launching an active ETF? Why now?
Address this head-on. Communicate the investment problem you are solving and the conviction behind the strategy before introducing the vehicle. This builds credibility and prevents unintended perceptions that an ETF launch represents a retreat from managed funds.

2. Positioning for whitespace

Different markets and adviser bases prioritise different factors. In Australia, investment philosophy ranks highly in fund selection; in Hong Kong, brand reputation carries more weight. Messaging must therefore be market-specific, not one-size-fits-all. Differentiating the wrapper’s sweet spot and clearly articulating its use case creates space for both products to coexist.

3. Build a high-quality, insights-led narrative

Effective advertising starts with clear audience personas and an understanding of what truly differentiates your strategy. A strong narrative reduces confusion, improves message retention and ensures each wrapper reinforces the broader investment story rather than competing with it.

4. Deliver content-led, storytelling campaigns across the user journey

Running identical campaigns for both wrappers is a common and costly mistake. Instead, create distinct user journeys, each with its own objective, message, content format and KPI. When every stage of the funnel is purposeful and stress-tested, small optimisations compound into stronger outcomes, better qualification and higher-value engagement.

5. Leverage technology and data

Measure effectiveness by wrapper and audience. By using tools like Alphix Solutions (Fundamental Group’s marketing technology business), asset managers can track engagement at a company level, understand which audiences are drawn to which vehicle, and tailor follow-ups accordingly. This alignment between sales, product and marketing ensures clarity and optimises conversion throughout the funnel.

Conclusion

Active ETFs are not replacing managed funds, but they are now a permanent part of the product landscape. To promote both vehicles successfully, asset managers must:

• Communicate why both exist
• Segment audiences and tailor campaigns
• Highlight clear wrapper differences
• Build distinct, insight-led narratives
• Think in ecosystems, not one-off ads

The winners will be those who communicate with clarity, precision and strategic intent, delivering one investment strategy through two well-differentiated vehicles.