Active fund managers have either introduced their own actively managed ETFs or, in a trend that is on the rise, partnered with established ETF sponsors. [SSgA, MFS Partner on Active ETFs]
However, some “have to date largely avoided introducing their leading strategies as transparent ETFs because the required daily holdings disclosures can facilitate front-running of portfolio trades and enable other investors to replicate the fund’s portfolio positioning and exploit its research insights. By removing the requirement for daily portfolio transparency, ETMFs can potentially enable investors to access a broad range of proven active strategies through a vehicle that provides the investor benefits of an exchange-traded fund,” according to Eaton Vance.
The ETF industry is still dominated by passive, index-based ETFs. There are 74 actively managed U.S.-listed ETFs on the market with $14.9 billion in assets, compared to the overall 1,548 ETFs with $1.7 trillion in assets.
Other ETF issuers and mutual funds such as T.Rowe Price (NasdaqGM: TROW) have shown interest in a nontransparent ETF structure for actively managed strategies. [Precidian Highlights Nontransparent ETF Plans]