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The emotional response to ETF structures among investment professionals is fascinating on both sides of the border. It shows a general lack of understanding of regulatory structures, but also how deeply held beliefs are hard to change
Most of the confusion comes from not understanding the structure of the vehicle, and the belief (particularly in the US) that ETFs are passive structures. In Canada we have had a boom in Active ETFs for two reasons:
1 - ETFs are mutual fund trust structures up here where they face the same disclosure requirements as funds - so no daily positions 2 - As heavy ETF users advisors and institutions welcomed lower cost active ETFs cause they were used to the structure
However even for smart investors understanding ordering, volume, liquidity etc is confusing. Especially if you are used to only large caps or funds. But this can be overcome! Just need to google ETFs flows and see all the active shops figuring it out up here
What does this mean for the US? I think it means in 5-10 years the interest in active ETFs will boom. Not because of tax benefits but because the shelf will be lower price than traditional and private funds. A lot of innovative managers are committed
to making good active management accessible, and while you could launch a 70bps fund it will continue to make more sense for it to be an ETF.
It’s important to note in Canada brokerages can’t block off advisors from ordering ETFs except within special platforms. This is not true in the US where ETFs need to pay for shelf space 
along with their fund counterparts. My hope
along with their fund counterparts. My hope
is lower fee options across the allocation board will help true fiduciaries lead the industry in innovation. Institutions who stick to the old rules and ideas will ultimately be left behind.
