The transparency of an ETF has been a major hang up for the industry. The idea that holdings are available in real time, at any time of day, opens up the doors for front-running. Are managers afraid of giving up their strategies and expertise? [Investors Actively Manage Passive ETFs]
“Actively managing an ETF means that investors are free to simply copy a strategy without paying a management fee, but as a practical matter, that usually doesn’t happen. Most rational people aren’t going to go every day to my Web site to see what percentage each holding is,” Noah Hamman, founder and chief executive officer of AdvisorShares said. [ETFs vs. Active Managers]
ETFs have rapidly expanded and investors are positive about the merits of the funds. The active management space is likened to be the next frontier for this prolific industry.
Tisha Guerrero contributed to this article.
