Actively managed ETFs can “initiate a new growth curve” for the entire asset management sector, according to McKinsey & Company, Financial Times reports. Assets of active ETFs could exceed $1 trillion within 10 years if they followed the same growth pattern as passive ETFs.

Active ETFs currently represent about 1% of the industry’s $1.62 trillion assets. McKinsey advised “prudent managers” to weigh the risks to their existing businesses and the new opportunities that would arise if active ETFs took off. Tom Grave, equity analyst at Standard & Poor’s, cautioned that successful managers may be unwilling to abide by the expectation that holdings be disclosed on a daily basis, affecting the growth of actively managed equity ETFs.

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