Turn Cash Into Opportunities With Active Management

Geopolitical tensions, easing monetary policy, and tariffs are just a few of the market forces that are breeding uncertainty in today’s environment. These may keep investors situated in cash when they could be turning it into profitable opportunities. With a record number of actively managed ETFs coming into the market, it’s an opportune time for investors to get off the sidelines, bring their cash, and invest in these flexible funds.

Other reasons for the hesitancy to participate in the markets could be lofty valuations, especially when it comes to large tech stocks fueled by the AI theme. Investors feel they may have missed out on the strongest market moves given the current rally. As such, Thornburg portfolio managers Adam Sparkman, Phillip Gronniger, and Josh Rubin noted in a market insights commentary that a record number of investors have been stashing away cash as opposed to taking part in the markets.

“The current market environment features approximately $7 trillion in cash sitting on the sidelines, representing one of the highest levels in decades,” the managers said. “This situation presents a significant opportunity for active managers to attract capital from investors who may feel they have missed out on market rallies. Especially considering that have most likely begun an interest rate-cutting cycle, where money market rates or yields are starting to decline.”

Consider International Exposure

The aforementioned rate-cutting cycle will apply downward pressure on the dollar, which could boost international equities. It’s an area that’s garnering additional investor interest and an ideal place to park uninvested cash.

“Investors are increasingly considering putting their money to work by reallocating funds into international equities, especially as many have remained underweight in this area,” the Thornburg managers added. “With the U.S. equity market trading at a premium compared to international markets, there is potential for substantial returns by diversifying into cheaper, undervalued international stocks.”

Active management is a must when navigating international markets. They come with their own idiosyncrasies as well as systematic risks such as tariffs.  That said, investors should consider funds like the Thornburg International Equity ETF (TXUE) as well as the Thornburg International Growth Fund ETF (TXUG).

The actively managed funds take advantage of the expertise and experience of Thornburg’s investment management team. For core international equities exposure, TXUE presents an ideal option. Meanwhile, those looking to lean into the growth factor for international equities exposure should consider TXUG.

Click here to learn more about TXUE and here for TXUG.

This article was written by Ben Hernandez and originally published by VettaFi.

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