Actively Managed ETF’s Fail To Catch On
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06:39:11 pm on January 19, 2011

Actively Managed ETF’s were a bit of a hot topic last year and many are saying they will catch on because of the advantages over mutual funds such as better liquidity and lower fees, but for now the actively managed ETF segment has failed to catch on and there are currently just a handful of ETF that are liquid enough for consideration.  In addition, there are zero actively managed ETF’s available for equities that are liquid enough for consideration.  Part of the reason is due to SEC red tape and it takes many months to be approved.  I’d expect we’ll see more of these begin trading this year, but until we get more actively managed ETF’s focused on equities with a history of solid performance, they will fail to catch the attention of the average investor. 

Here are the only four actively managed ETF’s liquid enough to consider at this time (at least from what I’ve been able to find).

WisdomTree China Yuan ETN (CYB) which seeks performance similar to money market rates in China (averages 242K shares traded per day)

WisdomTree Emerging Markets Currencies (CEW) seeks performance similar to money market rates in emerging market countries (170K shares/day)

Pimco Enhanced Short Maturity ETN (MINT) invests in short duration debt securities (141K shares/day)

WisdomTree Brazil Real ETN (BZF) seeks performance similar to money market rates in Brazil  (68K shares/day)

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Active management – truely active, not the closet index, active management we typically see – will build momentum. These active etf’s are just gaining momentum. Its early yet – but this time next year will show a significant rise in AUM for the active etf markets…

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