At their conception, ETFs only tracked indexes, but today there is also demand for actively-managed ETFs.
ETFs tend to look a lot like passive index mutual funds, except that they can trade intra-day like stocks, while mutual funds only settle within 24 hours. In the last decade or so, there has been an increasing market for actively-managed ETFs as well.
It is somewhat ironic that the popularity of actively-managed mutual funds has decreased while an abundance of actively-managed ETFs has appeared. The popularity of ETFs has grown enough for fund managers to attempt more and more things.
A passively-managed ETF will have lower expenses and will use algorithms to track indexes or follow specific index-oriented strategies. Actively-managed ETFs employ a larger staff of analysts and fund managers who seek to generate “alpha,” or returns over and above a benchmark.
Passive funds only seek to replicate the benchmark. With greater anticipated returns come greater management fees and expenses, however, and some ETFs now charge as much or more than actively managed mutual funds.
What is Index Investing?
What is Active Trading?
What is the Difference Between Active and Passive Money Management?
A covered call is when the writer or seller of a call option either owns the underlying security, or has a guarantee
If there is a lot of hype surrounding the IPO, it may be a good strategy to immediately sell them while the frenzy is on
The surest way to make tax-free withdrawals is to wait until you are older than 59½, but there are a few other ways
The Hang Seng Index (HSI) is comprised of the 50 biggest stocks traded on the Hong Kong Stock Exchange
Even people who only make an average salary can easily become millionaires. Doing so boils down to a very basic formula
The “buy side” refers to businesses in the financial services industry such as pensions, mutual funds, and asset managers
The Three Falling Peaks pattern forms when three minor Highs arrange along a downward-sloping trend line
The Accounts Receivable Subsidiary Ledger is where all of the information related to all Accounts Receivable is reported
An options contract starts when the option is exercised, meaning that the option or buy or sell the security is utilized
In 2007, Qwest Communications CEO Joseph Nacchio was convicted of making over $50 million dollars through illegal trades