First, people were turning to ETFs because they are perceived to be cheaper, easier to trade, and offer tax advantages. Now a growing number of folks are arguing that an active fund can be mimicked by a bucket of ETFs.
Case in point: ETF.com analyst Elisabeth Kashner suggests a package of ETFs to replace
the Fidelity Contrafund
Meanwhile, Eric Balchunas
argues that investors can be their own equity analysts by using what he calls "robo-ETFs"
Can a bucket of ETFs replace an active fund? Can those things that arguably make actively managed funds unique be substituted by a set of formulae.
Let's back up a bit and ask a more fundamental question: How could this debate gotten this far already? Are active managers struggling this much now just to protect their existence?
What are you going to do about this?
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