The latest to file an application with the SEC to launch an
actively managed ETF is Bear Stearns. The Current Yield Fund, which
would invest in short-term fixed-income holdings, would be the first actively managed bond ETF.
I spoke with Lawrence Strauss from Barron’s about the pros and cons of actively managed ETFs. The implication is that one would expect actively managed ETFs to outperform their counterparts tied to a market indexes; especially if the internal expenses of the actively managed ETFs are greater. However, the vast majority on conventional actively managed mutual funds underperformed their benchmarks.
Finally, ETF investors expect portfolio transparency. It will be interesting to see if managers will be willing to share their portfolio allocation daily.
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.