The coming transformation of ETFs into mutual funds.

However, a thaw in the financial blizzard shows that the industry had been waiting for the right moment to revive what many consider the industry's Holy Grail. Coincidentally, a new entrant in the field named Grail Advisors launched the first post-financial-crisis active ETF last month.

"We are operating the ETF just like a fundamental mutual fund," said Grail Chief Executive Officer Bill Thomas in an interview. This ETF, he added, is "similar to traditional actively managed mutual funds ... because it allows portfolio managers unrestricted trading."

And in a little-reported move that BlackRock didn't miss, iShares, the brand name for BGI's ETF family, last month began the registration process to launch two active ETFs.

Is this a good thing for the ETF industry? Possibly. Is it a good thing for investors? Definitely not.

Most ETFs offer greater tax efficiency because, unlike mutual funds, they don't buy or sell the shares they own. Every time a mutual fund sells shares, it creates a taxable event, which its shareholders must pay taxes on. However, ETFs receive their securities in a tax-free swap. An institutional investor known as an authorized participant gives a basket of all the securities in the index to the ETF in exchange for ETF shares. With no shares traded inside the fund, there are no taxable gains to pass onto shareholders.

By contrast, the whole point of an active fund is to actively trade stocks. In this case, the ETF could incur significant capital gains, which shareholders would pay taxes on. Grail's Thomas countered that the subadvisers running its fund don't trade a lot and have a reputation for tax efficiency.