Although actively managed exchange traded funds (ETFs) have hit the market, there is still debate as to whether or not they will succeed.

In their infancy, these ETFs don’t have a track record, which is one of the ways investors often select actively managed mutual funds. So it could take some time, reports Cardiff de Alejo Garcia of Financial News. Another issue is that institutional investors account for about 40% of ETF holdings and wouldn’t be interested in this type of product. They want the liquidity and transparency, which may be compromised in actively manged ETFs.

Regulators are still working on solutions to these issues, with ideas such as restricting the number of trades a single fund can make each week or requiring the fund to execute trades on the same day. As the product evolves, so too will a solution.

State Street conducted a survey recently of asset managers, banks and financial advisors. Form the survey they found that 60% of respondents have changed the way they construct portfolios because of ETFs. They like them for their liquidity (and the ability to short them), but find that some of them track untested indexes, which they see as a disadvantage. These responses seem to be in-line with the discussion on actively manged ETFs.