State Street, JPMorgan

Money managers including Janus Capital Group Inc., State Street Corp., T. Rowe Price Group Inc. and JPMorgan Chase have since sought permission from the U.S. Securities and Exchange Commission to open their own actively run ETFs. Active ETFs have gathered about $5.1 billion in assets in four years, according to data compiled by the ICI.

One reason active ETFs haven't grown as quickly as index products is that brokers don't have the same financial incentive to sell them as they often do with mutual funds on their own platforms, Matt Hougan, president of ETF Analytics at IndexUniverse.com, said in an interview.

Strategic Insight's Fox said fund companies are still trying to understand the target audience, given that a big portion of investors in the market are institutions and hedge funds who frequently trade in and out of ETFs.

'Seminal Moment'

The Pimco Total Return ETF is opening at a "seminal moment" for the fund industry, said Scott Burns, managing director of ETF Research at Morningstar Inc. in Chicago. Investors have been pulling money out of active mutual funds and moving into ETFs, in part because of the lower fees. Last year, a net $118 billion of ETF shares were issued, compared with redemptions of $130 billion from U.S.-registered equity mutual funds and deposits of $125 billion into bond mutual funds, according to the ICI.

"The industry is looking for ways to reverse that trend, and one of the ways is by lowering the fees and lowering the hurdle rate," Burns said.

Pimco's new ETF may not attract sizable assets immediately because "most advisers will take a wait-and-see approach to see if, in fact, the active-management component of this fund provides alpha and outperforms the benchmark," said Tom Lydon, editor of ETF Trends in Irvine, California.

Gross was born in 1944 in Middletown, a steel-company town in Ohio. His father, Sewell "Dutch" Gross, worked at Armco as a sales executive; his mother, Shirley, was a homemaker.

Gross, 67, said he is aware of the obstacles ETFs face before they catch on with investors.

'Challenge Is Obvious'