Industry Updates

Active managers have a transparency problem - News Roundup

David Tuckwell

Active ETFs transparency problem

Active ETF managers dislike transparency because it requires them to reveal their investment strategies. But transparency is crucial for ETFs as it allows market makers to see arbitrage opportunities. What can active ETF issuers do to get around this? One answer might be the 'blind trust' model, where market makers trust a broker they know well, and the broker has privileged access to the active funds management strategy. While the idea has promise, it has hit regulatory hurdles.

Young and old like different ETFs

Different generations want different things from ETFs. Millennials prefer low-cost low-risk equity ETFs - the plain vanilla type. Older generations are more interested in commodity ETFs, such as energy, and are more open to costlier and riskier ETFs.

More AUM for ETFs in six months than previous 12

ETF saw more inflows in the first half of 2017 than in the entire 2016 calendar year put together. As the market continues to consolidate, Blackrock is emerging ever more obviously as the pack leader, taking the lion's share of AUM in the first half.


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