However, the transparency of actively managed ETFs is a deterrent for some fund managers who are considering launching actively managed versions of their existing mutual funds.

“Most active equity managers don’t want what they are buying and selling to be known, so transparency can be a disadvantage,” panelist Joel Dickson, principal and senior ETF strategist with Vanguard, told Financial Advisor magazine. “We haven’t launched an actively managed ETF because of investment restrictions around derivatives, swaps and options and the disclosure requirements.”

To date, fixed-income products comprise the bulk of actively managed ETFs. Pimco claims the lion’s share of assets under management among all active ETFs with $5.8 billion compared to Wisdom Tree’s $2.7 million. AdvisorShares has $683 million and State Street has $48 million, according to an AdvisorShares report from October 31.

Financial advisors are a key potential market for active ETFs, but some advisors so far have been reluctant to dive in. Brian Parker, who manages $1.3 billion at EP Wealth Advisors in Torrance, Calif., said he currently doesn’t include actively managed ETFs in his investment strategy because they are in their infancy. “There are too few choices, especially in the equity space, but as the market matures we certainly will consider them for client’s portfolios."

State Street launched its three actively managed ETFs this past spring specifically for hesitant financial advisors who’ve resisted investing in actively managed ETFs. “We’ve introduced actively-managed ETFs that own other ETFs in a fund of funds structure that can be purchased by financial advisors," Quigg said, noting that the potential appeal for advisors is that these funds are managed similarly to traditional asset management.

These SPDR offerings include the Income Allocation ETF (INKM), which has $29 million in assets, the Multi-Asset Real Return ETF (RLY), with nearly $11 million, and the Global Allocation ETF (GAL), with $9 million.

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