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I have written in the past that actively managed ETFs may be the game changer in the battle between mutual funds and ETFs. �When I have written such posts, I had equity ETFs in mind as opposed to bond ETFs. But it seems that these actively managed bond ETFs are picking up steam. Why?
There are several challenges that actively managed equity ETFs face that go beyond this post (e.g., holdings disclosure, track records), but more and more fund companies are launching actively managed bond ETFs. Eaton Vance is the latest to join this space�-- �joining Pimco, Blackrock , Grail, and others.
In the past, perhaps, more of the new bond funds would have been created under a "closed-end fund" structure as opposed to an ETF structure? This question cannot be answered, but we can make assumptions. It makes sense that the advantages of an ETF (e.g., features that allow new share creation that may reduce the impact of "discounts to NAV") may outweigh the advantage of a closed-end structure -- particularly with respect to bond funds.
Read More About ETFs vs. Mutual Funds
ETFs vs. Mutual Funds: An Active vs. Passive�Debate
What Are Closed-End Funds?
Thoughts on Actively Managed ETFs originally appeared on About.com Mutual Funds on Sunday, March 14th, 2010 at 15:41:09. Permalink | Comment | Email this |
