Why are ETF providers messing with success by trying active management?
Mark Jewell, writing for the ASSOCIATED PRESS, came out with a story today called “Traditionally laissez-faire fund segment goes hands-on.” He goes into the basics of ETF’s at first, then talks about the BlackRock Deal and other generalities of ETF’s. Tucked within the article he explores why the ETF industry would chose to go the road of active management. He states the following, “So why are ETF providers messing with success by trying active management? Think evolution: There are now more than 700 index ETFs, ranging from funds mirroring the Standard & Poor’s 500 index to higher-risk ETFs offering exposure to a single industry, overseas market or commodity.
So something new that seeks to juice returns by using some degree of investment screening is a natural outgrowth.
“Actively managed ETFs seem like an obvious avenue to go down to see what kind of traction that they can get,” said Loren Fox, an analyst who helps lead ETF research at the New York-based mutual fund consulting firm Strategic Insight. “We think there is genuine potential there.”
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