Despite the obstacles, exchange traded fund (ETF) providers are on a mission to make stock picking expertise available through these funds. An actively managed ETF will be the main push on providers’ lists in 2008, as many are jockeying to be the first to market.

Meanwhile, the American Stock Exchange has taken steps to be the first to list the first actively managed ETF, reports Lawrence Carrel for TheStreet.com. Whichever firm is the first to launch one will also be entitled to bragging rights and the first pass at mainline mutual fund investors.

Besides the technicalities involved with launching an actively managed ETF, there are concerns that freely picking stocks could undermine their transparency, which is a key selling point of traditional ETFs. Low cost is another advantage of ETFs, but active trading eats into returns because trading costs add up.

2008 should be a landmark year for the advent of these active funds. But for right now, providers are just trying to formulate a fund that would pass muster with the Securities and Exchange Commission (SEC).