{"id":24170,"date":"2011-09-29T12:34:12","date_gmt":"2011-09-29T16:34:12","guid":{"rendered":"http:\/\/countingpips.com\/fx\/2011\/09\/29\/charles-sizemore-discusses-actively-managed-etfs\/"},"modified":"2011-09-29T12:34:12","modified_gmt":"2011-09-29T16:34:12","slug":"charles-sizemore-discusses-actively-managed-etfs","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2011\/09\/29\/charles-sizemore-discusses-actively-managed-etfs\/","title":{"rendered":"Charles Sizemore Discusses Actively-Managed ETFs"},"content":{"rendered":"

By The Sizemore Letter<\/a><\/p>\n

\"\"<\/a>Charles Sizemore gave his thoughts on actively-managed ETFs to Jane Wollman Rusoff in the October issue of Research Magazine<\/em>.\u00a0 Here are a few highlights from the article:<\/p>\n

\n

That new kid on the block with the monogram \u201cETF\u201d isn\u2019t just passing through town \u2014 the exchange-traded fund is here to stay. And what\u2019s been hyped for three years as the next big thing in the hot ETF market, actively managed ETFs, may soon spark major change… Alongside the immensely popular passive ETFs that track indexes, there are currently trading at least 36 active ETFs, whose managers seek to outperform the indexes…<\/p>\n

In a perfect world, passive and active ETFs will coexist. \u201cThere\u2019s room for both,\u201d says Charles Sizemore of Sizemore Capital Management, in Dallas, and editor of The Sizemore Investment Letter<\/em><\/a>. \u201cIf you find a good manager, an active ETF can definitely add a couple of points to your return every year. But there will be times when passive index exposure \u2014 in bonds or stocks \u2014 is exactly what you want.\u201d<\/p>\n

But as efficient as ETFs are, if invested with imprudence or using inappropriate funds, the vehicle can backfire.<\/p>\n

\u201cAn ETF is like a gun \u2014 in the right hands, it can be used effectively and efficiently. In the wrong hands, it can be deadly and lead to financial destruction,\u201d<\/strong> Sizemore says. ETFs\u2019 famed liquidity is double-edged. \u201cThe flip side to being able to get in and out of the market quickly is the tendency to overtrade, and that\u2019s one of the biggest detriments to long-term investing success. Financial advisors get lured into it, and they do so at their own risk.\u201d<\/p>\n

Sizemore considers leveraged ETFs \u201cmore of a gambling tool that encourage Mom and Pop investors to take risks they can\u2019t afford.\u201d<\/p>\n

Mostly, there\u2019s plenty to cheer about in the ETF space; for example, the availability of emerging markets\u2019 sector funds.<\/p>\n

\u201cThey enable you to invest in emerging markets and also cherry-pick the sector you want to get into. So, for example, you can get direct exposure to emerging markets\u2019 consumers,\u201d says Sizemore. \u201cEmerging Global Shares has a suite of ETFs that includes an emerging markets\u2019 consumer ETF ($<\/span>ECON<\/a>).\u201d<\/p>\n

Though providers continue to bring out an endless parade of new ETFs, some may be suitable only for short-term trades: that is, if narrowly focused, they might be thinly traded and have little chance of longevity.<\/p>\n

Sizemore once invested in a luxury goods ETF but, never attracting enough assets, the fund closed.\u00a0 In 2009, Stevens launched a family of faith-based ETFs \u2014 for the five largest Christian denominations in the U.S. \u2014 but FaithShares is now defunct too. \u201cNot enough assets were gathered to make it profitable,\u201d he says.<\/p>\n<\/blockquote>\n

To read the article in its entirety, please see “The New Wave of Active ETFs<\/a>.”<\/p>\n

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 <\/p>\n","protected":false},"excerpt":{"rendered":"

By The Sizemore Letter Charles Sizemore gave his thoughts on actively-managed ETFs to Jane Wollman Rusoff in the October issue of Research Magazine.\u00a0 Here are a few highlights from the article: That new kid on the block with the monogram \u201cETF\u201d isn\u2019t just passing through town \u2014 the exchange-traded fund is here to stay. And … <\/p>\n

Continue reading “Charles Sizemore Discusses Actively-Managed ETFs”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-24170","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/24170","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/comments?post=24170"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/24170\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=24170"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=24170"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=24170"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}