Morningstar’s Guide to Active ETF Due Diligence
Why are actively managed ETFs growing in popularity?
The demand for actively managed ETFs is booming, driven by their unique benefits of tax efficiency, low fees, and innovative trading structures. Asset managers are responding with tactful market strategies, including mutual fund conversions, ETF share class options, and the launch of pioneering active strategies.
However, investing in ETFs requires a deep dive into due diligence. While there’s overlap with traditional fund evaluation, ETFs introduce specific considerations: expense structures, bid/ask spreads, trading frictions, portfolio transparency, and market adaptability. Missteps can lead to inefficiencies, higher costs, or even liquidation risks.
Download the report to discover more on active ETF strategies, market dynamics, and actionable benchmarks for evaluating portfolio performance evaluation.
