Actively managed ETFs: are they starting to make a difference?
There have been very few actively managed ETFs that have come to market. This week, one interesting ETF in this group did make it to market: the Dent Tactical ETF (DENT), which began trading yesterday.
The DENT has attracted surprisingly heavy volume for its first two days of trading.
This is a true actively managed fund, essentially an ETF of ETFs, that will invest in virtually all asset classes across all geographic barriers: stocks, bonds, commodities.
The brains behind it, Harry Dent, published several books in the early 2000s that were bullish on the markets. While the extreme bullishness did not exactly happen (a Dow of 14-15,000 by the end of 2006--it ended slightly above 12,000), he did garner a following around the core idea that demographic trends greatly affect the economy and the markets.
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Dent popularized the idea of investing based on demographic trends--in particular the baby boomer spending wave theory--which argued that as the U.S. population ages, the boomers will concentrate on paying down debt and saving for retirement, which means spending less.
How does this translate into an ETF portfolio? Dent is negative on the U.S., Europe and Japan, and surprisingly, not that positive on China, due to the country's one baby per couple limit. He is positive on India and Latin America.
This is one of several actively managed funds, this one by a new company called AdvisorShares Investments. More info at www.advisorshares.com
PowerShares also has a small roster of actively managed ETFs.
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