Exhaust is hotter closer to the engine. Cats need to get to a certain temperature to work, which is why your exhaust smells more on cold starts. Manufacturers used to put the cat under the car. Now they are bolted right to the manifold, to get them hotter faster. So it will start working faster and earn a smiley face from the EPA.
Once the exhaust gets to temperature, the position of the cat will make less of a difference, but still cause a CEL because it doesn't clean like the factory catalyst. Most people with downpipes run an O2 spacer, which tricks the sensor and prevents a CEL. The J-shaped spacer works on my APR downpipe (which has the cat under the car) to prevent the CEL.
The APR cat has a very slight smell once warmed up, but if you want a cat with no smell at all, keep the stock one.