Exchange traded funds (ETFs) have taken the investment world by storm becoming a leading competitor to traditional open-end mutual funds. For some time fund firms have been trying to create actively managed ETFs. A number of technical roadblocks have to date prevented the launch of any such ETF.

Dan Culloton in a Fund Spy column for asks an interesting question: Do we really need actively managed ETFs?

This article is somewhat technical in nature and is probably appropriate for investors who have an existing interest in ETFs. Culloton clearly lays out the pros and cons of such a product. In the end he comes out as a skeptic:

In the end actively managed ETFs may sacrifice too much of what has made index ETFs successful. Who wants more expensive, and less tax efficient and transparent, ETFs? Once actively managed ETFs arrive, they will bear the burden of proof to deliver what they promise before long-term investors can regard them as viable alternatives.

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