Proponents of actively managed exchange-traded funds say their dream may soon become a reality and begin trading later this year, Dow Jones Newswires reports.

Actively managed funds, which track individual portfolio holdings with almost real time precision, are considered the holy grail of ETF investing, but regulatory hurdles have kept the investments on designers' drafting tables for years.

Active portfolio managers, who typically delay revealing their portfolio holdings for at least six months to deter copycats, have also frustrated the evolution of ETFs from index-based investments. But a few investment experts at American Stock Exchange member firms say the problem can be overcome by publicly disclosing a separate tracking strategy that mirrors the guarded master portfolio, but that contains only a few of the same holdings of the underlying index.

This vision enables investors to monitor "interday indicative values" of the tracking portfolio without revealing its actual contents. The compromise between full disclosure and providing active trading features not found in ordinary mutual funds may satisfy regulators and individual investors, Amex officials say.

Amex is still working out a few bugs in matching performance figures linking the tracking portfolio and master portfolio, but the exchange is confident its system is nearly ready. In a separate effort, Amex officials are also developing an actively managed ETF portfolio that reveals its actual holdings.

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