Why Vanguard is still cautious on active ETFs

The early success of the active ETF version of Bill Gross' PIMCO Total Return fund does not yet herald a step change in the exchange-traded market, according to Vanguard's global head of ETFs.

PIMCO has made a high profile move into the  space in the US with the launch of an exchange-traded version of Bill Gross' $259bn Total Return Bond fund. The Total Return fund ETF has amassed $1bn in assets since its launch on 1 March and has beaten the mutual fund on performance over that period, returning 1.8% in its first month versus a 0.12% return for the original product. Rick Genoni said issues over transparency requirements means he remains cautious over the prospect of other providers following the likes of PIMCO in launching active products. "The challenge with active mana...