I had the chance to catch up with Bloomberg Intelligence’s David Cohne earlier this month at the first-ever ICI ETF Conference in Nashville. David leads Bloomberg’s research on the mutual fund industry and active managers — and if you haven’t checked it out, he also hosts the Inside Active podcast, where he chats with top active managers and digs into new opportunities for investors.
Read on for his biggest takeaways from the conference, what he’s keeping an eye on in the active space, and more.
Dual share class took center stage at the ICI ETF conference. What was your biggest takeaway from panel discussions and other conversations on the topic?
Based on panels I attended and discussions I had, SEC approval of the ETF share class is imminent, and the focus should now be on the nuts-and-bolts needed to launch them, including infrastructure, recordkeeping, and compliance. There also seemed to be a desire for a universal system for exchanges and record keeping.
Mutual fund-to-ETF conversions continue to be front of mind. From your perspective, what are the most important considerations for managers weighing a conversion today?
I think managers need to view a conversion holistically. Determine if a conversion will enhance their long-term value proposition for both current shareholders and future ETF investors. While track record continuity is great, some strategies which invest in illiquid investments or in small markets that need capacity constraints aren’t necessarily a great fit for ETFs.
Active ETFs dominated the agenda. Based on what you heard, how are investor expectations shifting when it comes to transparency, liquidity, and performance in the active ETF space?
Active ETF investors today expect more access than they would with an active mutual fund. They want clear transparency in the form of daily holdings, which can provide more timely insights into manager portfolio positioning. They also want tight spreads. With mutual funds, they expected ease of redemption, but not intraday access. With ETFs, they want instant tradability and tight execution. When it comes to returns, they expect lower fees in the ETF wrapper but may be willing to pay slightly higher fees for active if a fund’s performance can justify those fees.
Your Inside Active podcast takes listeners deep into the world of active management. What gap are you trying to fill in the industry conversation with the show?
There’s no shortage of investing podcasts out there, but what we saw missing was a show that really shines a light on the world of active management itself, not just markets or macro headlines. Too often, the narrative is that passive has won and active is dead. We know that’s not the full story. Active managers are still innovating and adapting. With Inside Active, we wanted to go deeper into the philosophy and process behind active investing: how managers think about building portfolios, where they try to generate edge, and how they manage risk.
Which recent Inside Active episode best captures the state of active ETFs today, and what themes or guests are you most excited to feature in the coming months?
I’d point to our episode with Janet Rilling, Head of the Plus Fixed Income team at Allspring Global Investments. She gives a great look at how active bond ETFs are being managed today, which is useful for understanding what active ETF strategies in fixed income look like in practice.
We’ve got some interesting conversations coming up. One is with a CLO team, where we’ll dig into how collateralized loan obligations are being used and what that says about the broader credit markets. We’re also speaking with a portfolio manager who applies technical analysis in active management, which should give listeners a very different perspective on how charts and signals inform real investment decisions.