Doubts Expressed About Active ETFs

As the Securities and Exchange Commission moves ever-closer to fully approving the first actively managed exchange-traded funds, some experts predict a cool reception. Tom Lydon, president of Global Trends Investments and editor of ETFTrends.com, said the new breed of ETFs will not catch on because many ETF investors do their own asset allocation and use ETFs because they are cheap ways to track indexes. He said institutional investors and hedge funds in particular will likely shun the new offerings.

As the Securities and Exchange Commission moves ever-closer to fully approving the first actively managed exchange-traded funds, some experts predict a cool reception. Tom Lydon, president of Global Trends Investments and editor of ETFTrends.com, said the new breed of ETFs will not catch on because many ETF investors do their own asset allocation and use ETFs because they are cheap ways to track indexes. He said institutional investors and hedge funds in particular will likely shun the new offerings.

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