Actively managed ETFs still aren’t here. Morningstar calls them the Holy Grail of ETFs and recently outlined the pros and cons.
In the end, will they be worth waiting for? One of the key advantages of ETFs is the ability to know what underlying stocks are in the portfolio. Looking under the hood will be more of a challenge for actively managed ETFs. These managers look to provide alpha (better returns) whithout giving away all of their secrets. So, when they do finally arrive, there will be many eyes on the flow of assets. We’ll keep you posted.
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.