How You Can Explore Actively Managed ETFs with These 3 Providers

Man counting money

by: Doug Fabian

One major difference between exchange-traded funds (ETFs) and mutual funds is that ETFs tend to be passively managed. This means they follow the components of a specific industry group, sector, index, etc. Compared to mutual funds that are actively managed, ETFs cost a lot less. Yet sometimes in order to gain an edge on the market, active management is a must even if the costs are a bit higher. Fortunately, the ETF industry understands and created actively managed ETFs.

Such actively managed ETFs are not merely re-indexed according to a formula on a quarterly or annual basis, but actively trade and sell the relevant underlying securities on a daily basis. Three of the firms currently featuring actively managed funds are AdvisorShares, Columbia Management and PIMCO. AdvisorShares has almost 30 ETFs in its portfolio; Columbia has five, while nine of PIMCO’s 21 ETFs are actively managed.

One of the asset classes used by all three firms in their actively managed ETF efforts is, interestingly enough, bonds. Bonds are typically considered fixed-income securities. But when bundled together and actively traded via an ETF, they are subject to some of the same trading pressures and changing valuation as stocks.

AdvisorShares Madrona Global Bond ETF (FWDB) uses investments in various exchange-traded products to provide exposure to at least 12 global bond classes. Year to date, FWDB is up 4.18%, and the fund features a 3.16% yield.

FWDB_051414

PIMCO’s Build America Bond ETF (BABZ) invests in municipal debt issued through the Build America Bond program. That program was designed to reduce borrowing costs for U.S. states and municipalities. The fund is up 7.40% in 2014, while rewarding investors with a 3.87% yield.

Exclusive  85 Percent of Public Pensions Could Flatline

BABZ_051414

The Columbia Intermediate Municipal Bond ETF (GMMB) invests in a variety of tax-free bonds, typically due to mature within 10 years. The fund is ahead 2.22% so far this year, and it has a 2.77% yield.

You may want to consider an actively managed fund, if you want a more aggressive investment strategy. These three ETF providers give you the active investment that made mutual funds so popular, while maintaining the transparency and ease of trading of an ETF.

If you want my advice about buying and selling specific ETFs, including appropriate stop losses, please consider subscribing to my Successful ETF Investing newsletter. As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an e-mail. You just may see your question answered in a future ETF Talk.

In case you missed them, I encourage you to read my articles from previous weeks about ETF providers Market VectorsGlobal X, Deutsche BankALPS, Direxion, Fidelity, Charles Schwab, Guggenheim, PowerShares, WisdomTree, First Trust, ProSharesVanguard, iShares and State Street. I also invite you to share your thoughts below.

Like This Article?
Now Get Doug's FREE Special Report:
The New Gold Rush of 2016-2017

With gold already up 20% in 2016, one of the best market timers in the business sees even bigger things ahead. His free special report will show you how to play the coming “gold rush” for serious profits.

Get Access to the Report, 100% FREE


img
previous article

While the major indices basically have done so via a slow grind toward the top this year, it has been a different story for stocks in the emerging markets.

PREMIUM SERVICES FOR INVESTORS

Dr. Mark Skousen

Named one of the "Top 20 Living Economists," Dr. Skousen publishes 4 different investment newsletter advisories, including the award-winning Forecasts & Strategies, which has beaten the market over the last 15 years.

Product Details

LEARN MORE HERE

Bryan Perry

A former Wall Street financial advisor with three decades' experience, Bryan Perry focuses his efforts on high-yield income investing and quick-hitting options plays. Bryan's four newsletter and trading services include:

Product Details

LEARN MORE HERE

Nicholas Vardy

A Stanford and Harvard Law graduate, Nicholas Vardy scours over 40 different global markets every day to uncover new profit opportunities for subscribers. His 3 advisories and trading services include:

Product Details

LEARN MORE HERE

Doug Fabian

A 30-year Wall Street veteran and famed market timer, Doug Fabian is one the nation's foremost experts on ETFs (Exchange Traded Funds). His two ETF-focused advisories include:

Product Details

LEARN MORE HERE

Bob Carlson

In Bob's monthly newsletter, Retirement Watch, he provides independent, objective research covering all the financial issues of retirement and retirement planning. In addition, Bob serves as Chairman of the Board of Trustees of the Fairfax County (VA) Employees’ Retirement System, which has over $2.8 billion in assets.

Product Details

LEARN MORE HERE

DividendInvestor.com

Used by financial advisors and individual investors all over the world, DividendInvestor.com is the premier provider and one-stop shop for dividend information and research.

Product Details

Popular tools include our proprietary Dividend Calendar, Dividend Calculator, Dividend Score Card, and many more.

LEARN MORE HERE