The Cheapest Actively Managed ETFs

ETF Database submits: As the ETF world continues to grow, the competitive landscape continues to evolve. In recent years, a growing number of firms have attempted to differentiate themselves by offering unique exposure to asset classes and strategies not previously available – such as funds tracking the Philippine stock market or ETNs linked to the price of industrial metals such as zinc or tin.

Michael Johnston submits:When categorizing various investment vehicles, most investors tend to think of mutual funds and ETFs as polar opposites. Mutual funds are associated with active management, with a team of analysts and managers seeking to generate alpha by identifying undervalued securities from a relevant universe of stocks and bonds. ETFs, on the other hand, connote a passive investment strategy, products that seek to replicate the performance of a certain benchmark instead of seeking to beat it.

Shishir Nigam submits: U.S. One Inc, whose N1-A filing with the SEC to launch an Actively-Mananged ETF of ETFs we had previously discussed, today launched its first ETF product called One Fund (ONEF) which will be listed on the NYSE.

By Jarred Cummans:The ETF industry has been praised for the many advantages that it offers investors. Exchange traded products are liquid, transparent, and cover a broad range of investment classes to help round out portfolios. On top of all of these advantages lies the cost factor; one of the founding principles of ETPs was to maintain cost efficiency that had been lost on mutual funds.

Michael Johnston submits:It may be premature to hit the print button for the death certificate of active management, but changes to the investing landscape over the last several years have forced a reassessment of the value proposition this strategy offers. Research suggesting that active managers fail to add value is, of course, nothing new.

Michael Johnston submits:When running down the benefits of constructing a portfolio with ETFs, most investors will touch on the potential for enhanced tax efficiency, intra-day liquidity and transparency in holdings. But the biggest benefit, in the minds of those accustomed to using primarily actively-managed mutual funds, are the low expense ratios.

Jarred Cummans submits:The ETF industry took flight nearly two decades ago, an addition to the investing landscape spurred by disappointment with traditional actively managed mutual funds and interest in developing more flexible tools consistent with an index-based strategy. Though the very first ETF was built with traders in mind, ETFs quickly emerged as an ideal fixture for “buy and hold” portfolios. ETFs have exploded onto the scene in recent years, with over 1,100 products now available and plenty more on the way.

Shishir Nigam submits: The actively-managed ETF space has continued to see interest from major asset managers in the United States, with Alliance Bernstein being the latest player to throw its hat into the ring. There are now 23 different US issuers that have filings with the SEC to launch actively-managed ETFs.