In the relatively new exchange traded fund industry, the nascent actively managed ETF space is just beginning to expand, and investors should expect more options as money managers try to edge into mutual fund territory with a cheaper investment wrapper.
Investors will see more actively managed ETFs that cover target income, commodities, emerging markets, managed futures, hedged products and other alternatives, reports Margo Epprecht for On Wall Street.
“The theme as of late is ‘all things different,'” Noah Hamman, founder and CEO of AdvisorShares, said in the article.
The active ETF space is currently dominated by fixed-income options, such as the PIMCO Total Return ETF (NYSEArca: BOND), an ETF adaptation of PIMCO’s flagship Total Return Fund. BOND has $3.5 billion in assets under management.
The rising rate environment caused some investors to seek out fixed-income alternatives. For instance, the newly launched SPDR Blackstone/GSO Senior Loan ETF (NYSEArca: SRLN) provides access to high-yield senior floating rate bank loans that helps mitigate the negative effects of rising rates. SRNL has gathered $592 million in assets. [What Active Senior Loan ETFs Bring to the Table]
While active equity ETFs provide lower fees, compared to similar mutual funds, equity investment options have been slow to launch.