How are actively managed ETFs likely to be structured, managed and operated?
Actively managed ETFs will likely be structured in a manner similar to existing index-based ETFs. 2. How will investors use, and benefit from, actively managed ETFs? The growth over the last few years in index-based ETFs reflects investors’ growing understanding and acceptance of the benefits and features that ETFs offer over traditional index-based open-end management investment companies, or mutual funds.1 Since January, 1993 over 100 ETFs have been introduced that now have over $80 billion in assets. A research study conducted by Financial Research Corporation on “The Future of Exchange Traded Funds” found that the primary reasons for investor interest in ETFs are tax efficiency, trading flexibility, lower expense ratios, diversification and continuous pricing.2 One need only compare the growth rate of index-based ETFs to that of traditional index mutual funds to demonstrate investor demand for the more flexible ETF product. Actively managed ETFs could provide many of the same featu
