Asking the Right Questions About Active ETFs
Everyone wants low-cost, transparent access to the best managers--you just need to ask them
Last week, at IndexUniverse's Inside ETFs conference, active ETFs were once again in the spotlight. With the impending March 1 launch of the active ETF version of PIMCO's popular Total Return fund the furor over whether or not active ETFs would be successful seemed to take on a heightened level importance with the industry and the media. While a lot of pros and cons were bandied about over the issue, it struck me that no one was in fact asking the right questions, nor were they asking the right people.
Loaded Questions, Loaded Answers
If you walk up to someone on the street and ask them, "Are you interested in active ETFs?" you'll probably get a very strange look. I know I generally do. Now, if the person you ask happens to be an informed investor, they will probably respond something more akin to, "ETFs can be active?" or "No, I don't want an active ETF."