ETF experts say as more major fund companies add actively managed portfolios, it will help to shape the ETF industry’s long-term future. Case in point is the biggest index fund company of all, Vanguard. Vanguard has launched eight active fixed-income ETFs. Roger Hallam, Vanguard global head of rates, cites these strategies in being integral for generating repeatable returns for clients. “We’re very focused on delivering bottom-up security selection to ensure that our alpha generation is as high information as it can be, so that we deliver repeatable returns for our investors over the investment cycle” Hallam said on a recent CNBC “ETF Edge” segment. The Vanguard ETFs include an ultra-short treasury ETF (VGUS), a 0-3 month T-Bill ETF (VBIL), a short duration bond ETF (VSDB), and a long-term tax exempt bond ETF (VTEL) amongst others. ETF experts caution that there is a big difference between adding active strategies to add return potential around a portfolio core of index holdings and becoming market timer, with the latter still a mistake too many investors make when markets are volatile. In the equities space, some of the newest active approaches are designed to limit risk in the stock market rather than ratchet risk up. Amid a year which already experienced one huge market drop, it’s important for investors to not over-correct based on short-term swings in performance. But active strategies make sense in ETFs, according to BlackRock’s U.S. Head of Equity ETFs Jay Jacobs, for reasons that go beyond the recent bond and stock market volatility. The ETF experts also say that investors may seek more return generation from active approaches if the last decade of market returns proves to be unrepeatable. The ultra-low interest rate policies from the Federal Reserve which boosted the performance of the stock market in particular are not expected to return, and that has implications for what investor can expect from their core holdings. The shift to more of these active strategies marks not only a significant change in how asset managers are tweaking their ETF portfolio lineups, but in how investors are approaching the market.