ETFs have always been known for the enhanced transparency that they provide to investors and coming through 2008/2009, that transparency and clarity in what their fund holds is more precious to investors than ever.
Mutual funds usually make quarterly disclosures on their holdings. A quarter is a long time in markets these days – if you were talking about a quarter in late 2008 or early 2009, you could have seen the Dow drop 5,000 points and still not know what was happening in your mutual fund.
Unlike mutual funds, investors in Active ETFs or for that matter any ETF can get in and out of their investment whenever they like and at any time during the trading day. This provides investors with a much more flexible product that they can trade to their liking.
In times of market stress, this liquidity can become crucial – even if there is hardly any volume in the market, the market makers for ETFs are obliged to provide a bid or ask price to investors, albeit with a higher spread.