Bear Stearns was planning to make a splash by offering the world’s first actively managed ETF on March 18th, but instead the company got hit by a tidal wave. Then on March 25th, the company did something that surprised many investors and industry observers, including me. The beleaguered investment bank introduced the first actively managed ETF; the Bear Stearns Current Yield Fund (Ticker: YYY) March 25 on the American Stock Exchange, now trading at about 100 on low volume.

About 10 days before, on March 14th, Bear was rescued from insolvency by the Federal Reserve Bank of New York and JP Morgan Chase after the company was on the brink of collapse due to a lack of financial liquidity. The company’s stock price subsequently plummeted from around $62 a share to the $2 to $3 range. The stock (Ticker: BSC) has since recovered to the $10 per share neighborhood, but is still badly damaged.

Given Bear’s shaken financial reputation, it’s hard to imagine investors having much confidence in its ability to manage an active ETF, much less its own corporate ship.

Gathering substantial assets in its newly introduced ETF will probably be a very tough sell for Bear. Its best chance of success will probably come after the company is absorbed by JP Morgan Chase and the fund is re-branded. Until then, anything with the Bear Stearns brand on it, should have negative stigma.

The greenlight to introduce the first actively managed ETF has been the fund industry’s latest coveted trophy, as companies attempt to position themselves as innovators in the burgeoning ETF marketplace. Today, almost all ETFs are linked to a single currency, commodity, or index.

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Ron DeLegge is the San Diego-based editor of www.etfguide.com.