Risks (ETFs)
What Are Actively Managed ETFs?
Actively managed ETFs do not track underlying indicators, unlike indicator-tracking ETFS which are linked to specific indicators such as a stock price index with the aim of achieving specific financial results. In general, active management allows managers to flexibly make decisions on stock selection and asset allocation in accordance with a predetermined fund management policy.
Points to Note when Investing in Actively Managed ETFs
Actively managed ETFs have different characteristics in terms of price movements and expected returns than indicator-tracking ETFs.
As actively managed ETFs do not track underlying indicators, management companies can response flexibly to market conditions and other factors. However, there is also a possibility that management striving for high returns may result in price movements that cannot be explained by overall market conditions or investment performances that underperform the benchmark.
Actively managed ETFs listed on TSE are currently required to disclose portfolio information daily, but it should be noted that the information is as of the previous day's NAV calculation.
Since the assets in an actively managed ETF may be constantly changed, the estimated net assets per unit (iNAV) calculated and distributed during trading hours based on the portfolio information will not always reflect the price of the underlying ETF assets.
Points to Note when Investing in Actively Managed (Specialized) ETFs
Actively managed (specialized) ETFs are ETFs where dominant issues exist (or are likely to exist) within the investment target. There is a possibility that the allocation ratio for the same issue may become high, and if the price of this particular issue declines, it may lead to significant losses compared to non-specialized ETFs, causing the fund's NAV to drop substantially.