29 Nov 2017

Active ETF's - just a type of Closed-end fund?

ETF's have not been really tested in a major market downturn or panic. 2008-09 does not count as amounts involved were still quite small, and focused on simple structures linked to major indices. The next 'Big One' will be different. As I see it, active ETF's are pretty similar to Investment Trusts (UK) or Closed-end Funds (USA). They are just trying to keep NAV and Market Prices as close as possible. But will they succeed? Only time will tell. I for my part will be happy to capitalize on any price distortions - and distortions there will be (or the 'Authorities' will shut the market).

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