The pace of exchange-traded fund launches has doubled over the past two years as mutual fund players become the latest wave of converts to tap into the rapidly growing ETF market.
Exactly 200 ETFs were listed on the US markets during the first half of 2021, compared to 131 for the same period last year and 100 between the first six months of 2019, on Financial Time reports.
Recent launches have included traditional active managers like Guinness Atkinson and Dimensional Fund Advisors, who have converted their offerings into a more convenient ETF structure.
New entrants to ETFs and the expanding range of strategies have emerged to meet the growing demand for ETFs among investors.
“Even with $ 6.5 billion in listed ETF assets in the US, we also expect more innovative, low-cost products to come to market in the second half of 2021 and new investors and advisors to discuss the benefits on offer. by ETFs, “Todd Rosenbluth, director of ETF research at CFRA, said in a note.
In previous years, large established ETF providers have been at the forefront of new product launches. However, in recent years, the biggest mutual fund managers have also turned to the ETF space.
For example, new entrants to ETFs include Putnam, Algiers, and Gabelli funds, which each got their start in ETFs through non-transparent or active non-transparent ETF methodologies. These structures do not disclose the ETF’s portfolio to the wider market, which allows active fund managers to keep their “secret sauce”.
Putnam proposed four strategies using Fidelity’s portfolio protection methodology in May, while Algiers and Gabelli launched ETFs through the Precidian Investments ActiveShares system. Dimensional launched its ETFs in November 2020 after converting four of its mutual funds to ETFs in June. Additionally, American Century launched six active ETFs this year, including one non-transparent active fund and five that disclose their holdings on a daily basis.
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