Is 'active ETF' an oxymoron?
Grail Advisors has announced the registration of four "actively managed" Exchange Traded Funds. According to William M. Thomas, the CEO of Grail, "one of our goals from the outset was to bring traditional active fund managers to the ETF marketplace."
Here's my question to Mr. Thomas. Why would anyone want to do this?
According to Allan S. Roth's excellent book, How a Second Grader Beats Wall Street, the probability of a portfolio of ten actively managed domestic funds beating a total U.S. index fund over a ten year period is a pathetic six percent.
This is the "expertise" that Grail Advisors is bringing to the ETF marketplace.