Prudential has launched two actively managed exchange-traded funds: the PGIM QMA Strategic Alpha Small-Cap Growth ETF (PQSG), which aims to top the performance of the Russell 2000 Growth Index, and the PGIM QMA Strategic Alpha Small-Cap Value ETF (PQSV), which attempts to outperform the Russell 2000 Value Index.

It seems, says John Del Vecchio, co-author of "What's Behind the Numbers?", co-manager of the AdvisorShares Ranger Equity Bear ETF (HDGE), and developer of WeatherStorm Forensic Accounting Long-Short ETF (FLAG), like more and more, firms are using the word "active" management when in fact these are quantitative strategies that could just as easily track an index. Smart beta has been around a while.

"So, there's nothing new here," he says. "Their use of 'active' is just a buzzword. What the market needs is more true active managers where actual people pick stocks and manage risk."

According to Del Vecchio, the last 10 years or so since the financial crisis have been a boon for passive investing. "It's been very easy to just buy the S&P 500 and ride it up," he says. "But, the market moves in cycles. Recently, a lot of stocks in the S&P 500 have reached bear market territory. Meanwhile, the indexes are only down a little bit because the returns have been driven by a select few stocks."

The benefit of active management in the next cycle, says Del Vecchio, is that managers can snap up real bargains out of the ashes of a bear market and vastly outperform to the upside. "Meanwhile, the indexes might not do much, weighed down by the same stocks that drove the returns this time around," he says. "It's very rare for the leading stocks in one cycle to be the leaders of the next."

For this type of true active management you're going to pay more than 0.29%, he says." But, it may in fact be well worth it," says Del Vecchio. "Sometimes you get what you pay for."

These portfolios that firms are launching are not true active management other than in a legal sense, he says. "So, I suspect they are using the term in order to differentiate against the competition because the ETF space is already overcrowded with strategies," says Del Vecchio.

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