NEW YORK (TheStreet) -- While Barclays' (BCS) new Wealth ETF Tactical Allocation BETA Portfolios are a unique stop forward for the much-anticipated active ETF industry, these asset allocation strategies eschew many of the basic characteristics of ETFs that have made the funds so popular.
The eight new portfolios are geared toward wealthy investors, with at least $10 million in assets, who are looking to open small, actively managed accounts. These strategies are intended to be applied to a small account like a trust.
Limited availability and lack of transparency will make these strategies hard for many ETF investors to swallow. At the same time, the launch of these ETF portfolios reflects an ETF industry shift towards broader asset allocation strategies and long-term management products traditionally seen in the mutual fund industry.
Thus far, the hotly anticipated, actively managed ETF products have had trouble gaining traction. Investors accustomed to using low-priced ETFs to target specific sectors and themes have been slow to adopt higher-priced active strategies that are often less transparent in their objectives and defined in their scope.While the new Barclays products will be available only to select investors with large accounts, a number of actively managed funds are currently available to U.S. investors on the major exchanges. Grail Advisors launched the Grail American Beacon Large Cap Value (GVT) in early May 2009. The active ETF issuer followed GVT's debut with four other active ETFs in early October, including the RP Technology ETF (RPQ) and RP Financials ETF (RFF).
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