Active ETFs have the potential to provide interesting advantages for our clients.
Structural strengths
Structural strengths and enhanced product choice have elevated ETFs as vehicle of choice for investors, while regulatory progress and efficient capital markets have honed the structure as a tool for active Asset Managers.
Liquidity and Ease of Access
ETF shareholders may enjoy improved tax-efficiency, liquidity and ease of access, while Managers benefit from operational streamline and distribution flexibility.
Easy to Trade
Investors can buy and sell ETF shares during the trading day at prevailing market prices. Conversely, most mutual funds trade at the end of the day at a specified NAV. Additionally, investors can place a variety of orders (e.g., limit orders or stop-loss orders) that can't be placed with mutual funds.
Transparency
Most ETFs are required to publish their holdings daily, offering greater visibility. However, some ETFs are non-transparent or semi-transparent, allowing them to publish holdings in a delayed fashion. The Brown Advisory Active ETFs publish holdings daily on the website.
Tax Efficiency
Through the creation and redemption process, ETFs may reduce annual capital gains distributions relative to mutual funds.
“As our institutional business continues to grow rapidly, we are launching this product to serve clients evolving needs and investment goals. This fund, the first of multiple ETF offerings, will satisfy demand and provide clients with a tax-efficient, transparent, and liquid investment vehicle while still offering exposure to a broad range of securities.”
CHRIS BARTLETT
HEAD OF INSTITUTIONAL BUSINESS
ETFs can offer investors unique benefits through the interplay of primary and secondary markets, ensuring access, liquidity, and fair pricing.
Understanding market risk is key for investors to ensure an ETF is meeting its objectives. By examining key risk metrics investors can determine if an ETF is performing its intended role and decide whether to hold or sell.
ETFs offer a range of benefits that can make them an attractive investment option. To help ensure investors own the ETF that best fits their objectives, understanding the benefits of ETFs is key.
ETFs offer a range of benefits that can make them an attractive investment option. To help ensure investors own the ETF that best fits their objectives, understanding the benefits of ETFs is key.