I’m Keith DeGreen and this is your Investors Minute.
Just as investors are beginning to understand the simplicity of index-tracking ETFs, and the relative underperformance of most actively-managed mutual funds — some active fund managers have obtained SEC approval for so- called “actively-managed ETFs” – funds in which the manager again pulls out the wiji board and attempts to pick winners and losers within an index.
So far, actively-managed ETFs represent a small part of the $2T ETF universe – less than one percent. But the number is growing. They are somewhat more prevalent in the bond sector.
The PIMCO total return ETF, ticker BOND – a clone of its actively-managed mutual fund – is an example of an actively-managed ETF.
ETFs have gained rapid acceptance because they are transparent and don’t involve discretion. I strongly believe we should keep it that way.
FEE-ONLY DeGreen Capital Management. Pioneers in low-cost exchange-traded fund investing. Irvine: 949-333-4550. Scottsdale: 480-609-9900. www.DeGreen.com. Minimum portfolio requirement $1,000,000.
©DeGreen Capital Management LLC. All rights reserved.