Active ETF cannot beat Passive ETF

14 Dec 2010

It is not good for investor whose has active ETF. They think the active is better than the passive. I have read the article from Actively ETF is different with passive ETF. The management of active ETF must work hard to manage active fund. They do short selling, sector rotation, and buying on margin. On the other hand, a passive ETF manager will not do like that. They invest their money at index such as S&P 500.
Unfortunately, most active investor does not get money as they think. The active ETF cannot beat the index or market performance.
Actively-managed ETF is rare. It is because the technical challenge in creating the product. We do not know the share or stock price exactly. There is disparity price. To the big buyer such as ETF management, the stock seller give discount. You should know that the manager also get bonus from the stock selection for the ETF.

TAGS etf stock market index short selling Passive Management ETF active ETF passive ETF



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