Exchange traded funds (ETFs) are becoming more popular and as this happens, they are becoming more complex.

The line between the 15-year old industry and mutual funds is blurring as providers are jockeying to register the first truly actively managed ETF, says Stan Choe for the Associated Press. Such ETFs may beat their benchmarks, but with higher expenses – like a mutual fund. Another problem facing providers is the update of holdings. Mutual funds update quarterly, and some ETF providers are willing to disclose these daily, however, another fund manager can mimic a funds moves this way.

When actively managed ETFs hit the market, they’re going to hit with a great big thud. Most investors look to ETFs to simply track a market or sector, and they don’t want a manager doing their research for them.

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.