“There aren’t a lot of active ETFs out there — less than 1% of all ETF assets are in actively managed ETFs,” Fuhr said. “To be fair, PIMCO is one of the few big firms with success in active ETFs. Others who offer them don’t have the global recognition with a long track record in active funds.”
Also, ETFs requiring daily portfolio disclosure is less of an issue for fixed-income funds than equity managers.
The transparency issue remains as a “fundamental impediment” to active ETFs, particularly equity funds, said Stephen Clarke, president of Navigate Fund Solutions LLC, subsidiary of Eaton Vance Management. Eaton Vance has filed to launch a new type of ETF that would disclosure its holdings less frequently. [ETMFs Could Change the Fund Industry]
“Active ETFs that are currently available must be fully transparent on a daily basis,” Clarke said in the P&I report. “Most equity portfolio managers don’t want to do this for the risk of market participants seeing what you’re trading. PIMCO has successful ETF products, but they aren’t equity products.”
“Cannibalizing your mutual funds is a concern,” added Bill Golden, managing director and head of U.S. product at Legg Mason, in the story. “But active ETFs are still an important consideration. … For equity strategies, I would have a hard time with transparency. Not to say there aren’t other strategies that might work, but to clone an equity mutual fund with significant assets would be a tough decision.”