Pages Menu

Posted by on Jan 12, 2013 in Active Management, AdvisorShares

The Growth of Active vs. Passive ETF After 5 Years

We are updating our Active ETF to index ETF growth comparison.  After 5 years since the inception of actively managed ETFs, active ETFs continue to grow at a faster rate than index ETFs when compared to their first 5 years in the market.

While, active ETFs benefit from the education that index ETFs have provided, index ETFs in their early inception where most targeted at institutions which traditionally are early adopters and can invest significant amounts of capital.  Active ETFs have mostly been adopted by the retail channel through fee based financial advisors who understand the benefits of active management, but also desire the benefits of the ETF structure which include intra-day liquidity, better trading (risk) control (limit orders), transparency, and a more operationally efficient structure that reduces operational expense and can be more tax efficient.

Red-Active  Yellow-Index

chart 1

Chart 2

The AlphaBaskets blog provides frequent market insight and commentary by AdvisorShares Investments, LLC, created by AdvisorShares and other leading active managers.  AdvisorShares Investments is an SEC-registered investment adviser and the investment adviser to the AdvisorShares actively managed ETFs. The views expressed on AlphaBaskets should not be taken as investment advice or a recommendation for any of the actively managed ETFs advised by AdvisorShares.