In the exchange traded fund universe, traditional passively indexed products populate the markets. However, with the beta indexing space feeling a little crowded, the actively managed ETF frontier could contribute to the next growth phase and even vie with active mutual funds for market share.
According to a SEI research note, “Getting a Grasp on Actively Managed ETFs Before the Boom,” the ETF structure is an attractive investment vehicle for bringing active management strategies to market.
With the SEC lifting its moratorium on derivatives in active ETF products and new developments within the ETF industry, more are taking a serious interest in actively managed ETFs. [ETMFs Could Change the Fund Industry]
With giants like PIMCO already in the space and others such as Franklin, T. Rowe Price and Columbia Management working through the filing process, it’s clear that active ETFs are not a passing fad. [iShares Files More Actively Managed ETFs]
The market is in its infancy and there’s a long way to go before they are truly a rival for mutual funds, but as these products and managers develop track records and become eligible for Morningstar ratings the sky is the limit for active ETFs.
To request the full SEI paper, visit www.seic.com/ActiveETFs.
For more information on actively managed funds, visit our actively managed ETFs category.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.