Latest hybrid strategies blur the line between active and passive ETFs

Exchange-traded funds (ETFs) in the US and Canada are evolving to include funds that occupy a grey area between active and passive strategies.

The Horizon Gold Yield fund is one of a new breed of 'hybrid' ETFs

Toronto-based Horizon is planning to convert its Gold Yield Fund into an exchange-traded fund (ETF). The fund invests in physically backed ETFs and then writes covered call options on up to a third of the gold exposure. "That is a strategy which is not an index. It falls between traditional passive and active management, and I think we will see many more of those," says Howard Atkinson, president of Horizon ETFs in Toronto.

Atkinson says rules-based active strategies are easier to implement in