"Although actively managed exchange-traded funds are just in their infancy, many financial advisers and even some ETF providers have already written them off. That's a mistake,"
David Hoffman Reports From Investment News.
"This week saw the launch of two actively managed ETFs: the Pimco Enhanced Short Maturity Strategy Fund (MINT), from Pacific Investment Management Co. LLC, and the iShares Diversified Alternatives Trust (ALT), from Barclays Global Investors. Other such ETFs are planned. It may take some time, but actively managed ETFs are likely to catch on with investors," Hoffman Reports.
"Edward McRedmond, senior vice president of portfolio strategies at
Invesco PowerShares Capital Management LLC, explained it best during an
InvestmentNews round table onETFs held Nov. 4, an edited transcript of which will appear in the Nov. 30 issue. ETFs
, unlike conventional mutual funds, allow investors to pay most capital
gains upon final sale of the ETF. That feature means that money
earmarked for taxes in a mutual fund can continue to grow within an
ETF," Hoffman Reports.
"If you can capture back a big part of what's lost through the
mutual fund delivery vehicle, that in and of itself should be a huge
value for delivering active management through the ETF structure," Mr.
McRedmond said.
