BlackRock, Inc. (BLK): Why More Actively Managed ETFs Will Emerge

For example, last year PIMCO opened PIMCO Total Return ETF (NYSEMKT:BOND), an ETF version of bond guru Bill Gross’ wildly popular fund,which boasts over $288 billion in assets. And PIMCO Enhanced Short Maturity Strategy ETF (NYSEMKT:MINT), introduced in 2009, invests in bonds with maturities of one year or less, designed for investors who need liquidity. If these ETFs garner anything close to the esteem of their counterpart funds, then it’ll be a huge win for PIMCO. Not to mention an enormous one for the active ETF industry.

Developments in the active ETF space
As with PIMCO, it’s highly likely that financial institutions will turn many more actively managed mutual funds into ETFs. Even though Fidelity has not yet launched them, the mammoth financial services provider is working on a roster of actively managed ETFs. In announcing its recently expanded partnership, Fidelity emphasized that its relationship with BlackRock, Inc. (NYSE:BLK)‘s iShares is limited to passively managed ETF strategies.

But because Fidelity lacks a strong ETF presence itself and BlackRock, Inc. (NYSE:BLK)’s efforts at running actively managed funds have been lackluster, this courtship seems destined for an ETF marriage made in heaven. With Fidelity’s vast lineup of actively managed funds, a more extensive BlackRock, Inc. (NYSE:BLK) partnership could one day birth active ETFs modeled after already popular Fidelity funds.

Foolish bottom line
By no means is the active versus passive argument over. One style doesn’t emerge a clear winner that completely eliminates the need for the other. As the debate continues, ETF providers are catering to you, regardless of which side of the argument you fall on.

The article Why More Actively Managed ETFs Will Emerge originally appeared on Fool.com and is written by Nicole Seghetti.

Fool contributor Nicole Seghetti has no position in any stocks mentioned. Follow her on Twitter @NicoleSeghetti. The Motley Fool recommends BlackRock.

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