The value proposition of exchange-traded funds (ETFs) has long been simple: pay a very modest fee for the ease of a ready-to-buy portfolio of stocks that are accessible with a single trade and that are rebalanced and maintained by someone else.
Most often, this has meant passive funds tied to an index and rebalanced every quarter or so. However, actively managed funds—those that are generally not linked to an index but rather consist of portfolios maintained by professional managers, which typically lead to higher costs for investors—are upending some of these long-standing assumptions by charging low fees.
