Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
It's all about marketing. What is the next hot investing idea, and how quickly can we get it to market? It is much easier for companies to roll out an ETF than a mutual fund. Both have a lot of regulation, but logistically I have been told on many occasions by ETF sponsors that ETFs are pretty simple to put together once an index has been created for the investment theme. I am fearful that many of the ETFs that are created for such small niche categories will be gone within 2-4 years of creation, and we have already seen that happen many times. Having the most ETFs does not mean they are all worth of consideration.
It is much easier for companies to roll out an ETF than a mutual fund. Both have a lot of regulation, but logistically I have been told on many occasions by ETF sponsors that ETFs are pretty simple to put together once an index has been created for the investment theme.
I'd like to see more active etfs come out. One advantage of them is that it is much cheaper (transaction fee) to purchase an active etf than it is an actively managed mutual fund that is not on the no transaction fee list of a discount brokerage. For example, a $49.95 transaction fee vs. $8 etf fee. Or Bill Gross's Pimco Total Return ETF, with no load on the eft, and a lower expense ratio than the no-load investor shares mutual fund version, for those who don't have access to the Institutional shares version. (Not that anybody is actually buying Bill Gross' fund this year!)
I've read that one reason for the lack of actively managed etfs is that etfs require daily disclosure of the portfolio positions, which active managers don't like to give.
What I'd also like to see more of is exchange traded funds that are just different share classes of the active mutual fund, as Vanguard specializes in. I've read that Vanguard has a patent on that, and until that patent expires, we won't be getting actively managed funds that are just a different share class from other fund companies.
Comments
I've read that one reason for the lack of actively managed etfs is that etfs require daily disclosure of the portfolio positions, which active managers don't like to give.
What I'd also like to see more of is exchange traded funds that are just different share classes of the active mutual fund, as Vanguard specializes in. I've read that Vanguard has a patent on that, and until that patent expires, we won't be getting actively managed funds that are just a different share class from other fund companies.