“At present, just $5 billion of the current $1 trillion-plus that is invested in ETFs is invested in actively managed funds. Additionally, well more than half of that $5 billion is soaked up by 3 ETFs–Pimco Enhanced Short Maturity Strategy ETF (NYSEArca: MINT), WisdomeTree Emerging Markets Local Debt (NYSEArca: ELD), WisdomTree Dreyfus Chinese Yuan (NYSEArca: CYB). In fact, equity-based actively managed ETFs make up a fraction of that $5 billion–just $83 million or so,” Robert Goldsborough wrote on Morningstar. [ETF Chart of the Day: Pimco Enhanced Short Maturity Strategy]
Major mutual fund providers such as Fidelity, Eaton Vance and T.Rowe Price have all filed with Securities and Exchange Commission to offer actively managed funds. Some providers are even offering their most successful mutual funds in an ETF format. [Active ETFs Set to Support industry Growth]
Many industry skeptics don’t think that active ETFs will ever have as much market share as mutual funds or passively traded ETFs. Transparency still remains the largest concern, as the opportunity for front running the competition is not appealing. Even if mutual fund assets decline, the higher fees that active ETFs incur will be a hurdle. [Active ETFs Seen Hitting $1 Trillion Within a Decade]
Tisha Guerrero contributed to this article.