“I think I would draw an example maybe back to when we took the SATs [in high school, and we had]to do those analogies,” Goolgasian added. “I would say, passive is to ETF, as what is to a glass? In my mind, the answer is not as specific as milk is to glass; it is liquid is to glass. We could put anything in that glass, and you could put anything in an ETF.”
Moreover, when comparing the ETF wrapper to the mutual fund wrapper, he points out that the investors benefit from a number of attributes only found in ETFs. For instance, ETFs post holdings daily, come with significantly lower costs, offer liquidity and provide intra-day trading.
For more information on active ETFs, visit our actively managed ETFs category.
Max Chen contributed to this article.