A Managed ETF portfolio involves three participants — investor, portfolio manager, and ETF manager.
The portfolio manager actively manages the ETF portfolio to generate returns by changing the allocation to different style, sector, and strategy ETFs.
However, it is suggested that investments in a Managed ETF portfolio are better off being passively managed to avoid negative impacts on returns due to frequent and poorly timed entries and exits.
The portfolio manager's ability to select ETFs and effectively time the market are crucial in generating alpha returns, with the product recommended to be kept separate from the core portfolio and structured as an open-end fund.