Nevertheless, when fund providers do decide to jump in. They want to make sure they are doing it right the first time.
“These are large firms with established brands, and you don’t want to be perceived as a failure in any way if things don’t work out,” Papazian added.
Larry Fink, the CEO of BlackRock, which manages the iShares ETFs, said he expects to see a pickup in active ETFs with a change of the SEC rules on derivative use. [Active ETFs May Boom After SEC Lifts Derivatives Ban]
However, he said there is a lot of “noise” about active ETFs. “We believe in them but we don’t expect them to become anything large to the extent of what core type of ETFs will produce,” Fink said.
For more information on the mutual fund providers, visit our mutual funds category.
Max Chen contributed to this article.
Full disclosure: Tom Lydon’s clients own BOND.