Author Topic: Active ETF  (Read 1632 times)

yahui168

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MrCash

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Re: Active ETF
« Reply #1 on: March 14, 2014, 11:38:39 PM »
I thought this was already a thing?  Don't leveraged ETFs have to be active? 

yahui168

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Re: Active ETF
« Reply #2 on: March 14, 2014, 11:47:41 PM »
Leveraged ETF uses financial derivatives and debt to amplify the returns of an underlying index so it's not managed in the sense that someone stock picks. For example, you put in $1000 into a leveraged ETF, the guys running it borrow another $1000 from the bank and buy $2000 worth of the index. The index goes up 10%, the leveraged ETF goes up $200 making you a 20% return. Active ETFs are like actively managed mutual funds where someone picks stocks based on some "strategy" but it trades like ETFs with fees like actively managed mutual funds.

beltim

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Re: Active ETF
« Reply #3 on: March 15, 2014, 12:00:37 AM »
I thought this was already a thing?  Don't leveraged ETFs have to be active?

Yes, these have been around for at least 5 years. Active in the sense of picking stocks, not just leveraged.