This is an actively managed ETF that does not track a specific benchmark, with the portfolio manager selecting securities directly. It invests across a broad range of asset classes, including US-listed common stocks, preferred stocks, REITs, and depositary receipts (ADRs and GDRs).

It suits investors who want both the pursuit of excess returns through active management and global diversification.

The ETF is run with an active management approach by Keating Investment Counselors.

Rather than tracking a specific index, the fund directly selects and holds US-listed common stocks, preferred stocks, REITs, and depositary receipts that the manager judges to be undervalued. Depositary receipts of overseas-listed companies make up a sizable share, so the structure also offers regional diversification.

• Discretionary security selection by the manager rather than a passive index approach
• Regional diversification through exposure to overseas depositary receipts (ADRs and GDRs)

Assets under management (AUM) stand at $119.0M, and the expense ratio is 0.85% per year.

Unlike the large-cap active ETFs shown alongside it in the table, this fund has a composition in which the resource, energy, and telecommunications sectors are relatively prominent.

Given the nature of active management, returns tend to fluctuate with the individual earnings of the holdings and with commodity and currency movements, and the fund may diverge from its benchmark more than index-tracking products do.

As a small active ETF, its fund inflows and outflows are relatively modest compared with large index-based ETFs, and investor confidence in the manager's track record affects fund flows.

Its strengths are the pursuit of excess returns through manager discretion and global diversification, while its weaknesses are its small size and the risk of divergence from the benchmark that is inherent to active management.

BLCR, EAGL, LCAP, AVLC, and OAKM, all compared in the table, are active ETFs centered on US large-cap stocks. Some of them have relatively large assets under management and low fee structures, so they differ from this fund in size and expense ratio. Most of them also concentrate on domestic US large caps, whereas this fund has a relatively high weighting in overseas depositary receipts and resource and energy stocks, so the character of the portfolio itself is different. Comparable data on similar small active ETFs is limited, so it is reasonable to judge this fund by its relative position against the five funds in the table.

Here are the points to review before investing in KEAT. Because it is an active product that does not track an index, you should check the manager's security selection strategy, the size of the fund, and its share of overseas assets.

Because active management relies on the manager's discretion, performance may diverge from the benchmark, and the weighting in resource and energy stocks and exposure to foreign currencies can increase volatility.

The fund may be worth considering for investors who want excess returns based on the manager's stock-picking ability rather than index tracking, along with global diversification. However, the small fund size and the risks inherent to active management should be weighed together.