Flurry of actively managed ETFs to hit the market

Almost half of exchange-traded-fund providers plan to launch actively managed ETFs in the next several months, according to an upcoming Cerulli Associates Inc. report. Of these firms, 33% are planning actively managed ETFs without portfolio management trading restrictions, while 11% are planning to do so with trading restrictions, according to Cerulli's “Quantitative Update: Retail Alternative Products and Strategies.” That's good news for advisers — many of whom are looking for actively managed ETFs, according to the report. About half of the surveyed advisers used ETFs in 2009, up from 43% in 2008. The primary reason that advisers don't use ETFs is that they prefer active management, according to the report. “It's kind of bad news and good news for the ETF industry,” said Cindy Zarker, director of research at Cerulli and one of the authors of the report. “It might be harder to convince these advisers to use passively managed ETFs, but this could be good news for active ETFs and for actively managed mutual funds.” In the wake of the market crisis, asset management companies are focusing largely on absolute-return funds. Fifty six percent of surveyed firms said they are considering launching, or planning to launch, these funds this year. The Cerulli report will be published March 24.