Morningstar Inc. is sounding a warning to Wall Street money managers looking to pounce on one of the hottest trends of the past few years: the breakneck rush into active exchange-traded funds.
While this breed of fund has attracted record sums of cash in recent years, it’s no “panacea” for managers, according to a Morningstar report published this week. In fact, 74% of the nearly $630 billion in US active ETFs is controlled by the top 10 issuers in a field of about 320 firms that have embraced the wrapper — meaning that the pool of companies benefiting from the asset boom is exceedingly small.
