The exchange-traded fund (
) world remains abuzz with activity on the new launch and product
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.
New Funds Released This Month
|IQ Canada Small-Cap (Nasdaq: CNDA)
||Candian small-cap stocks
|IQ Australia Small-Cap (Nasdaq: KROO)
||Australian small-cap stocks
|FT ISE Global Copper (
||Copper mining stocks
|FT ISE Global Platinum
|State Street S&P Russia (
|Claymore/Wilshire US REIT
|Short FTSE/Xinhua China (
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
Editor: Market Advisor, The ETF Authority
Disclosure: Nathan Slaughter does not own shares of any security
mentioned in this article.