Actively Managed ETFs Experiencing a Surge, FT Report
Now that recent SEC exemptive relief has eased entry barriers, more fund managers are launching actively managed ETFS, which buy assets and do not track an index, the Financial Times reported. Citing data from FactSet and Ultimus, the reported noted there have been 42 new active ETFs listed as of June 4 compared with just 35 index funds. The report also observed that in the first five months of the year more index-tracking ETFs were liquidated than were launched. Experts quoted in the report say the surge in active ETFs can be attributed to margin erosion in the asset management industry and the ongoing fee wars, specifically the zero-fee ETFs launched by Fidelity and other large ETF managers. The report pointed out that firms are drawn to actively managed ETFs since they can charge more for an actively managed ETF than an index tracker.