Can PowerShares Still Beat Bear to Market with First Active ETF?

By Murray Coleman

Okay, so a firm date has been set for the first active ETF. But don't count Bruce Bond out just yet.

This is better than a soap opera, isn't it?

Last week, reporters from global wires services and the country's biggest newspapers were scrambling to cover claims that PowerShares was about to win the race to come out with the first active ETF.

Now, after last week's mad rush, what's up with the mainstream media's near zero interest with this ongoing drama?

On Monday, the asset management arm of Bear Stearns (BSC) made it official. By March 18, there will finally be an active ETF on the market. But I can't find more than three references to the story by day's end. And one of those is a link to our story picked up at Seeking Alpha.

Maybe news editors are embarrassed that they got the story wrong the last time around. But I kind of doubt it. Despite the temptation to view media-types as an advanced species with the ability to transmit thought patterns in unison, there's probably no big conspiracy going on.

Consider what was happening around the world on Monday. The investment banking side of Bear Stearns was being hit with dour reports. Its stock set a new low on Monday as its chairman was forced to publicly deny that it didn't have enough resources left to raise new capital. A downgrade of 163 securities issued by the investment banker also didn't help.

Perhaps PowerShares did more damage than first imagined. In many editors' minds, it wouldn't be out of the question if their first reaction to the Bear Stearns announcement today was that the industry was crying wolf again. For a general business news editor not schooled in the ongoing saga of ETFs, how many claims and counter-claims do you really want to flood readers with during these dog days of negative returns?

Another issue could be an over-hyping of the active moniker. How many times in the past few months have we heard some fund come out touting itself as active, only to find it's not much more than a super-duper quant original?

From a public relations angle, Bear Stearns had a lousy news day. You can say what you want about the marketing gusto of PowerShares executives. But give them credit for great timing. They got tons of attention last week.

But are they really done? Do you really think Bruce Bond and crew are going to sit around and wait eight days to come to market with ETFs that've already passed all of their regulatory hurdles?

Here's hoping PowerShares' brain trust is working overtime trying to race to market before March 18. What a story it'd be if they snatched the spotlight from Bear Stearns again!

• More on choosing the right ETF

Comments

[analyste de Boston]

Bear might be postponing launching quite a few projects, for awhile...