Clone or fund, the manager still has to beat the market

The real question is: why should a saver choose a mutual fund over an active ETF? There is no single answer, but several elements to take into account. Given that both are collective investment instruments, here are the peculiarities to consider.

"The distinguishing features," explains Mauro Panebianco, partner at PwC Awm Emea Advisory Leader, "are in terms of yield and costs, accessibility, transparency, liquidity and taxation, factors that make active ETFs an increasingly attractive solution for managers and investors because they offer the possibility of generating alpha relative to the benchmark thanks to the manager's discretionary choices, while maintaining a lower cost structure and lower upfront subscription charges than funds.

It is also possible to buy just one unit, they are tradable on the stock exchange and can therefore be bought and sold in real time. On the other hand, the mutual fund has the advantage that it does not 'tempt' the investor to trade his or her own fund, especially in critical market phases, and thus delegates the management of the product in full, a not inconsiderable aspect for the saver unaccustomed to fiddling with online platforms. But there is a critical aspect to bear in mind.

"We are not talking about discretionary active products," adds Marcello Rubiu, sole director of Norisk, "but very often they apply algorithms that offer the illusion of beating the market. Panebianco emphasises that active management of the underlying portfolio requires the same specialised skills as a traditional fund: 'The manager must still beat the market,' he explains, 'control risks and maintain consistency with the strategy.

Traditional asset management companies are accelerating their entry into the active ETF market, following a trend already established in the US. They are using them in both management and unit-linked business. "In order to compete with large international players, many companies are adopting targeted strategies," continues Panebianco, "such as converting mutual funds into active ETFs to exploit competitive advantages and respond to growing demand, or using white label platforms to simplify market access. Overall, the trend is moving towards a greater specialisation on thematic ETFs, integrating sustainability and active criteria, a sign of a structural evolution that increasingly integrates active management with the efficiency and transparency of the ETF format, exploiting a simpler tool than traditional funds, favouring industrial synergies and a reduction in operating costs'.