Due to the ETF structure, managers would have to provide daily disclosures of holdings. Many mutual funds, though, have been loath to reveal their secret sauce through an ETF offering. However, some are looking into nontransparent offerings instead, but SEC is still reviewing plans as regulators work on how providers would establish an accurate net asset value with a nontransparent offering.
Looking ahead, the active ETF space could be poised to break out as fund companies begin partnering up with other players.
“I think it’s going to break open, and I think it could break in the next year or two, where the fund companies are not going to jump into it themselves, but they will probably start to team up with existing players in the ETF space,” Lowry said.
For more information on the active ETF space, visit our actively managed ETfs category.
Max Chen contributed to this article.