Active ETFs Set to Support Industry Growth
September 12th, 2011 at 1:08pm by Tom Lydon
According to the New York Stock Exchange, growth in the U.S. exchange traded fund market will likely be supported by actively managed ETFs. A bevy of providers are waiting for regulatory approval to introduce active ETFs.
“Our pipeline continues to be quite robust and we have new prospect issuers coming to us with a high frequency,” Laura Morrison, vice-president of global index and ETFs at NYSE said, on IFA Online. [Active ETFs Seen Hitting $1 Trillion Within a Decade]
Many of the new players are interested in listing actively managed ETFs. Well-established companies such as JP Morgan, Dreyfus, Alliance Berstein, and State Street are in the process of an active ETF launch as well, reports Claire Dickinson for IFA Online. [Mutual Fund or ETF, It's Still Just Investing]
“There is heightened interest in the active transparent product type. We only have 41 listed on our exchange now, there is a decent number of new pending active ETF issuers that we are speaking with,” Morrison said.
Another area within actively managed ETFs that is taking shape is the non-transparent actively managed fund. This would require the fund to disclose holdings once per day, at the end of the trading session, similar to a mutual fund. BlackRock recently made this request in a filing. [BlackRock Files to Launch Active ETFs]
This request dodges one of the main hold-ups in the proliferation of active management with ETFs. The requirement of full portfolio disclosure with actively managed ETFs could lead to “front running.” Many providers and managers are gun-shy to launch an actively managed ETF until this issue can be resolved.
Some of the most successful active ETFs trading are Pimco Enhanced Short Maturity Strategy Fund (NYSEArca: MINT) with $1.44 billion in assets under management, and the WisdomTree Dreyfus Emerging Currency Fund (NYSEArca: CEW) with $574 million in assets.
Tisha Guerrero contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.