In order for the active ETF industry to take off, investor education is necessary to inform potential participants about the structure, risks and benefits. So far, the cost structure of an active ETF has proven beneficial, as the PIMCO Total Return ETF (NYSEArca: BOND) has amassed $4 billion in assets under management. The success of BOND has been influential for investors and providers, and has begun to pave the way for the industry. [PIMCO Total Return Ranks Third in ETF Sales Since March Launch]
“It’s always challenging to attract new money because there’s so much uncertainty due to the political and macroeconomic environment that investors are staying on the sidelines,”Alex Gurvich, managing partner of the Rockledge Group said. “There’s a need for education around actively managed ETFs because many investors and advisors are still using mutual funds despite the advantages of ETFs.”
Tisha Guerrero contributed to this article.
Full disclosure: Tom Lydon’s clients own BOND.