Actively Managed ETFs News:

With more mutual fund issuers considering entry into the actively managed exchange traded fund space, the main deterrent is fees.

Vince Lowry, founder and president of RevenueShares, believes that while the mutual fund industry may be griping about the transparency issue associated with ETFs, their main concern are the lower management fees, reports Jeff Benjamin for InvestmentNews. [Mutual Funds & ETFs: If You Can’t Beat ‘Em, Join ‘Em ]

“I personally believe the issue of transparent portfolios [for active ETFs] is not as big a problem as the fund companies want you to think it is,” Lowry said in the InvestmentNews article. “The real issue is the active mutual fund managers will have to cut their fees in half if they start offering active ETFs.”

The 85 U.S.-listed actively managed ETFs on the market have an average 0.84% expense ratio, according to XTF data.

Some companies are also concerned that an active ETF version of existing mutual fund strategies would pull in more investment interest and potentially cannibalize the mutual fund. [Passive Indexing in Active Portfolios ]

If they get into the ETF arena with similar funds that theyve built a whole business on, the sales force doesnt want it to happen because they would make less money and the company profits will also fall, Lowry added.

Due to the ETF structure, managers would have to provide daily disclosures of holdings. Many mutual funds, though, have been loath to reveal their secret sauce through an ETF offering. However, some are looking into nontransparent offerings instead, but SEC is still reviewing plans as regulators work on how providers would establish an accurate net asset value with a nontransparent offering.

Looking ahead, the active ETF space could be poised to break out as fund companies begin partnering up with other players.

I think its going to break open, and I think it could break in the next year or two, where the fund companies are not going to jump into it themselves, but they will probably start to team up with existing players in the ETF space, Lowry said.

For more information on the active ETF space, visit our actively managed ETfs category .

Max Chen contributed to this article .

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.