AdvisorShares Active ETF Market Share Update – Week Ending 10/25/13
Not a lot of changes occurred this week in the active ETF space. Assets increased by roughly $40 million. The big news for the week was the launch of a tactical commodity strategy by First Trust. This continues a growing theme for active ETFs, which is that demand will come from one of two main areas. The first is a better structure for existing popular strategies, such as the PIMCO Total Return ETF. The second is from strategies that are different or alternative in nature, such as First Trust’s newest launch.
Currently, it’s clear there isn’t as much demand for traditional strategies such as large cap growth or sector, but as managers offer those strategies in an active ETF and build a track record, investors will start to make a change. Keep an eye out for active ETFs achieving their 3-year Morningstar rankings. There are several active ETFs over the next 12 months that will see more interest as investors begin to understand not only the structural benefits of active ETFs, but also the performance benefits of active ETFs. As noted here in the past, it takes time for investors to get comfortable with the managers, strategies, and ultimately the risk adjusted returns that active ETFs can provide.
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