Active Management With Passive Investment Products

I took advantage of the day off to do a little extra writing with another Seeking Alpha exclusive that takes issue with another SA author's conclusions about how to use ETFs. The excerpt;

A recent article on Seeking Alpha by Tim Ayles made an unusual argument (unusual relative to the last few years) for actively managed mutual funds and ETFs. The building blocks of his argument include that active managers failing to “beat their index” does not necessarily matter; he would be ok with a fund that lags if the active manager of the fund takes less risk than the market. He only mentions beta as a means of assessing how much risk a fund takes, but beta is more about volatility, and risk and volatility are not necessarily the same thing.

Here is the link to the entire article, I hope you will check it out.