Nontransparent Active ETF Definition

Dec 04, 2023

Reviewed by: etf.com Staff

Edited by: etf.com Staff

Learn more about Nontransparent Active

Nontransparent Active ETFs mark an innovative evolution in the realm of actively managed funds. Unlike traditional actively managed ETFs that disclose their holdings daily, nontransparent variants shield their portfolio compositions. This opacity protects the fund manager's strategy from front-running and imitators. By disclosing holdings periodically or through other mechanisms, these ETFs offer a balance between the benefits of active management and reduced risk of information leakage. Nontransparent Active ETFs represent a dynamic solution for investors seeking the potential outperformance associated with active management while mitigating concerns about the transparency of their investment strategies.

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ETF Glossary

ETF Glossary is etf.com’s collection of key terms and definitions related to exchange-traded funds. ETFs are investment funds that are traded on stock exchanges, and they can encompass a wide range of asset classes, including stocks, bonds, commodities and more. Given the diverse range of ETFs and the complexity of financial markets, having a clear understanding of ETF-related terminology is instrumental for investors looking to make informed decisions, manage risks effectively and navigate the evolving landscape of ETF investments.

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