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Published: May 6, 2010
The
exchange-traded fund (ETF) world remains abuzz with activity
on the new launch and product development fronts.
Money managers like Pimco that have recently dipped their toes
into the ETF waters with bond ETFs are signaling intent to
branch out further. They will soon be joined by newcomers like
Legg Mason, T Rowe Price, Putnam and Eaton Vance, which have
already filed the appropriate SEC paperwork.
I expect these established fund families to
leverage their analytical resources by rolling out more
actively-managed ETFs. Already, there are around 20 of these
next-generation ETFs -- attracting more than $340 million in
assets. That's just a tiny sliver of the industry's $800
billion, but I think we'll see more of these funds grabbing a
larger piece of the pie going forward.
The transition will likely be evolutionary
rather than revolutionary, but wrapping professional day-to-day
management inside the low costs and tax efficiency of an ETF
could be a game-changer that marks the beginning of the end for
traditional mutual funds as the world's most popular investment
vehicle. (I've already heard of at least one mutual fund that's
exploring ways to convert to an ETF).
It will be exciting to see how this unfolds. If nothing else,
more players means an expanded menu of investment options and
downward pressure on costs -- good news for investors like you
and me.
In the meantime, issuers unveiled a number of promising new
funds last month. I've included several of the more intriguing
ones in the table below.
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The funds in this table should not be
considered buy recommendations, but I do profile one candidate
that is particularly interesting in the April issue of
The ETF Authority.
To read my analysis and gain access to my model portfolios
(where 27 out of 29 of my recommendations are positive),
click here.
I'll be following the actively-managed ETF story closely. Like I
said, it could be a game-changer and potentially spell the
dethronement of mutual funds. I'll keep tabs on this story, and
others, in the ETF world in the months ahead and will bring you
any new developments.
-- Nathan Slaughter
Editor
StreetAuthority Market Advisor
The ETF
Authority |
