Nontransparent Active ETF Definition
Learn the definition of nontransparent active etf and other ETF terminology from the etf.com glossary.
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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.