There are over 1,500 products from ETF providers to choose from and yet existing ETF firms and traditional mutual fund managers keep rolling out new ones. Indeed, more than three dozen new ones were launched in the first quarter of 2014. With a few exceptions, the new entrants to the ETF party can be grouped into three buckets: active ETFs that look like mutual funds, but are cheaper; currency hedged ETFs; and siblings of successful ETFs. While equity mutual funds were more popular in the first quarter than their typically lower-cost ETF cousins, investors poured more money into fixed-income ETFs than they did mutual funds.
Active ETFs Have Arrived