This Actively Managed ETF Still Has To Earn Its Stripes
The concept of actively managed ETFs is nothing if not interesting, though it's probably inaccurate to say the idea is one that investors have swooned over.
Yet, the actively managed space is where new entrants into the ETF arena typically head. Just look at the plans to get into the ETF game announced by the likes of Legg Mason (NYSE: LM), T. Rowe Price (Nasdaq: TROW) and others in the past year: They focus on the actively managed space.
In other words, expect the number of actively managed ETFs to continue growing, but in that process, don't forget about interesting fund that has been around for just a few months: The WCM/BNY Mellon Focused Growth ADR ETF (NYSE: AADR).
In its favor, AADR is home to familiar ADRs such as Baidu (Nasdaq: BIDU), Teva Pharmaceuticals (Nasdaq: TEVA) and Nestle (PK: NSRGY), meaning the fund is diverse in terms of geography and sector exposure.
On the other hand, and this is a problem faced by many actively managed ETFs, volume is terrible. How bad? Well, its 12:45 EST right now and AADR shows no trades for today.
An expense ratio of 1.25% is also problematic, another issue facing plenty of actively managed ETFs.
The idea behind AADR is a solid one, but until fees come down and volume increases, AADR, like so many other actively managed ETFs is best left to watch from afar.
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