The more choices the better, but managed ETFs will have a few challenges. First, since the vast majority of ETFs are tied to indexes, there is an understanding that future performance of an ETF will correlate to the corresponding index. If an ETF ends up underperforming the identified index, we’ll hear about it from many fronts.
It’s also implied that a managed ETF should outperform major market benchmarks. The jury is still out, but this has been difficult for most mutual funds. What’s to lead us to believe a managed ETF can pull it off? (Especially if we have no track record or index to guide us.)
Finally, there’s the issue of transparency. ETFs today offer investors a ongoing look at the underlying securities. Will managed ETFs be willing and able to offer the same? Investment News reports that one firm is making a stab at it.