Actively managed exchange traded funds are moving out of obscurity as investors become more educated on how the investment tool works and providers expand offerings.
State Street Global Advisor’s Chris Goolgasian on Morningstar explained that investors shouldn’t automatically associate ETFs with passive investments. Instead, people should look at ETFs as a type of wrapper that encloses a certain investment strategy, either passive or active in nature. [Active ETFs Pick Up Momentum]
“The ETF itself is just a wrapper,” Goolgasian said. “It doesn’t have to be associated with purely passive, just as mutual funds don’t have to be associated with purely active or passive. We’ve got plenty of active and passive mutual funds, and I think we’re going to have plenty of both in the ETF space, albeit that innovation is coming and growing.”
Goolgasian also likens ETFs to a glass cup where either vessel can be used to hold various contents.