Of course, the structure has not been tested through a crash. In that scenario, the bid-offer spread may widen, but as I am writing the bid-offer spread on the active ETF I now manage — the HANetf Global Balanced Fund Ucits ETF — is less than 20bp.

That is not dissimilar to the bid-offer spread on many investment trusts with a similar asset allocation — and a lot less than on many of the smaller ones. It can vary, of course. 

I believe that if the underlying assets are highly liquid — as they will be in a global equity fund, for example — then this is less likely to be an issue.

Alex Illingworth is the founder of Goshawk Asset Management