Active ETFs need time to catch on, some say
But for the trickle to become a flood, active ETFs will have to overcome a number of obstacles, not the least of which is the establishment of desirable performance.
“Would people want active management that comes with the tax advantages, transparency and liquidity of an ETF?” asked Scott Burns, the director of ETF analysis at Morningstar Inc. of Chicago and editor of Morningstar ETFInvestor, a monthly newsletter. “The answer is yes, but if it turns into a tradeoff for returns, the answer is no.”
It is a challenge, but some asset managers think that they are up to it.
The Grail American Beacon Large Cap Value ETF (GVT) from Grail Advisors LLC of San Francisco, which began trading on May 4, allows portfolio managers unrestricted trading.