4 Active ETF Developments to Expect in the Second Half of 2010
Wednesday, July 7th, 2010Shishir Nigam submits:
The Active ETF space first woke up in 2008, found some of its footing in 2009 and really started gaining some attention in the first half of 2010. We’ve seen lots of activity in this nascent sector that is still only a tiny fraction (at $2.11 billion) of the US ETF industry, which stood at $777 billion at the end of June, 2010. But it most certainly has attracted more than its fair share of debate from both the supporters, who think Active ETFs will be a big part of the ETF industry’s push into a mutual fund dominated investment landscape, and those that see Active ETFs as a passing fad that detract from the ETF structure’s “passive roots.”
Only time and, frankly, money will tell which side of the debate takes the honors, but my guess is we won’t be reaching a conclusion in this debate anytime soon. Looking at the bigger scheme of things though, any innovation that does not lead to a polarized debate from existing players, is likely not innovative enough to create any significant change in the industry. Whether it’s on their daily disclosure requirement or on their tax efficiency, the degree of polarization around the debate on actively-managed ETFs quite certainly meets that criterion.
