Gary Gastineau is trying to free exchange traded funds (ETFs) from their reliance on indexes. His company, ETFs LLC, is trying to develop an actively managed ETF – with a portfolio manager picking stocks. He and his former employer, Amex are in a friendly competition, vying for lead position in this area of the ETF race.
The obstacle that an actively managed ETF manager faces is revealing the securities in the fund every day. A manager is "not eager for rivals to learn immediately what he is buying and selling," reports Ian Salisbury for WSJ online. That is what Mr. Gastineau and his rivals are working on – a way to solve this problem. Then it will be up to the SEC to approve the solution in order for actively managed ETFs to move forward. Finally, the investor will have to be diligent about their research into the ETF to find out exactly what they are buying.
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.