Will 2012 be the year that the actively managed exchange traded fund finally takes off? Plenty of industry insiders are certain this is the fund of the future.
Actively managed ETFs have had assets grow about 64% over the past three years, with exchange traded products growing a total of 13% over the same time period. The recent launch of State Street’s three actively managed ETFs last Thursday now brings the total to 47 for the sector, compared to 1,500 ETPs in total, reports James Armstrong for Traders Magazine. [Schwab Files to Introduce Actively Managed ETFs]
Laura Morrison, head of U.S. ETP listing and trading for NYSE Euronext, says that about 9 ETF providers offer actively managed ETFs, but about 30 more have filed to launch sometime this year. For example, firms including AllianceBernstein, Deutsche Bank, Eaton Vance, Janus, JPMorgan, T. Rowe Price and Vanguard have all filed with regulators to issue actively managed ETFs in the future.
“The ETF structure is superior for actively managed strategies as well, in part due to their transparency. For a manager that takes large, highly concentrated positions, that transparency might be a hindrance, but it most cases, it’s a good thing,” Jonathan Steinberg, founder and chief executive officer of WisdomTree said.