After watching the exchange traded fund industry streak past $1 trillion of assets recently, a host of mutual fund companies are stepping up their efforts to get into the game—with a more active but pricier product for investors.
The Wall Street Journal’s Jonnelle Marte reports fund giants from Eaton Vance to Blackrock iShares have gotten regulators' approval to roll out what the industry calls more actively managed ETFs. Janus, AllianceBernstein and Dreyfus have sought permission. Last month, Pimco said it would launch an ETF version of its $240 billion Total Return fund.
Marte notes they are seeking to join the still-small group of actively-managed ETFs: funds that trade all day long on an exchange like stocks, but with underlying investments that are chosen, and traded, by a pro. Companies tout their market-beating potential—and charge more for the promise of added returns.
Fans say the new breed of ETFS will give investors a chance to juice returns at a still relatively low price. "It provides much broader and in many cases easier access to a firm like Pimco," Don Suskind, head of the ETF product-management team at the southern-California bond shop, told Marte.