First Actively Managed ETF Off to a Slow Start | ETF Trends

Now that the first actively managed exchange traded fund (ETF) has debuted, let’s check in with it.

On Tuesday, Bear Stearns (BSC) beat all other providers to market, with its Bear Stearns Current Yield Fund (YYY). On its first day of trading, 26,000 shares changed hands. On Wednesday, things had cooled considerably: 2,600 shares traded. Thursday saw 3,000 shares trade, reports David Wilson for Bloomberg.

One question is whether the drop in trading volume has more to do with a lack of investor interest in actively managed ETFs, or concern about the future of Bear Stearns overall. The question can really only be answered when more active ETFs come to market.

The ETF has $50 million in assets and owns debt with an average maturity of 180 days.

In keeping with the ticker symbol, Wilson has three "whys?" to ask regarding why the firm launched this ETF under current conditions:

  • Why did Bear Stearns get to go first?
  • Why start a bond fund when equity funds dominate the line-up?
  • Why introduce fund that inhibit managers ease of trading habits while they try buy-and-hold strategies? Buy-and-hold can be more rewarding over time due to cost efficiency.

Providers waiting in the wings to launch their own actively managed ETFs include PowerShares, Barclays, State Street, Vanguard, and WisdomTree.

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.