BNY Is More Than a Low Cost ETF Provider

BNY Mellon's zero-fee ETFs, the US Large Cap Core Equity ETF (BKLC) and Core Bond ETF (BKAG), have seen mixed results in 2025, with BKLC attracting $250 million in inflows while BKAG experienced $50 million in outflows despite its zero expense ratio; however, BNY's actively managed ETFs, particularly the Dynamic Value ETF (BKDV) and Global Infrastructure Income ETF (BKGI), have gained significant traction, attracting substantial inflows and demonstrating strong year-to-date performance, suggesting a shift in investor preference towards actively managed strategies within BNY's ETF offerings.

Analysis

BNY Mellon's exchange-traded fund (ETF) offerings present a bifurcated narrative in 2025, with actively managed funds demonstrating significantly stronger investor appeal compared to their zero-fee passive counterparts. The BNY Mellon US Large Cap Core Equity ETF (BKLC), despite its 0.00% net expense ratio and $3.3 billion in assets, has seen net inflows of just over $250 million year-to-date. In contrast, the BNY Mellon Core Bond ETF (BKAG), also with a zero fee and $2 billion in assets, experienced $50 million in net outflows YTD through May 23, lagging behind peer products from iShares and Vanguard which attracted over $2 billion each despite higher expense ratios. This suggests that a zero-fee structure alone is not sufficient to guarantee asset gathering in the current fixed income environment.

The firm's actively managed ETFs, however, are gaining considerable traction. The BNY Mellon Dynamic Value ETF (BKDV), launched in November 2024, has rapidly accumulated $310 million in assets, with $285 million flowing in during 2025 alone. BKDV, which carries a 0.60% expense ratio and focuses on undervalued companies with strong fundamentals and catalysts, delivered a 1.8% year-to-date return through May 23. Even more striking is the performance and asset growth of the BNY Mellon Global Infrastructure Income ETF (BKGI), which surged 25% in value YTD and gathered $110 million in new assets in 2025, tripling its asset base to $165 million. BKGI, with a 0.55% expense ratio, offers exposure primarily to utilities, energy, and industrials. Furthermore, BNY recently launched the BNY Mellon Concentrated Growth ETF (BKCG), an actively managed fund with a 0.50% fee, $115 million in AUM, and a focused portfolio of 26 positions, indicating a continued strategic push into active management. This trend highlights a potential investor preference for active strategies capable of navigating specific market themes or value propositions, even at a higher cost, over purely passive, zero-fee options within BNY's lineup.

Key Decisions for Investors

• Investors should evaluate BNY Mellon's actively managed ETFs, particularly the BNY Mellon Dynamic Value ETF (BKDV) and the BNY Mellon Global Infrastructure Income ETF (BKGI), given their significant asset inflows and, in the case of BKGI, strong year-to-date performance, which suggest robust investor confidence despite their expense ratios.
• Consider allocating to or increasing exposure in thematic active ETFs like BKGI if seeking infrastructure-related returns, noting its substantial recent growth and performance, but remain cognizant of its sector concentrations in utilities and energy.
• Exercise caution with the BNY Mellon Core Bond ETF (BKAG); despite its zero expense ratio, its recent net outflows in a market where peers are attracting substantial assets warrant a closer examination of its relative performance and suitability for fixed income allocations.
• Monitor the newly launched BNY Mellon Concentrated Growth ETF (BKCG) for potential opportunities in a focused growth strategy, assessing its performance and portfolio construction as it establishes a track record.