3. Shrugging their shoulders. Some managers recognize that it’s not very cost-effective for an individual investor to copy the portfolio and follow along. One portfolio manager says that the majority of investors would take the convenience of an active fund vs. trying to do it themselves just to save a few dollars a year.

The fact is, transparency benefits investors and it’s part of what makes active ETFs stand out from mutual funds. Mutual funds aren’t required to disclose their holdings more than once per quarter, and what you see on that statement may not be what’s currently in the portfolio. Perhaps others considering launching active ETFs will be persuaded to join in when they see that active management and transparency can work well together. [Actively Managed ETFs a Flop? Not So Fast.]

Visit our active management category for more stories about these types of ETFs.

Tisha Guerrero contributed to this article.