A Good Year to be a New ETF
December 27th at 7:00am by Tom Lydon
With 2013 winding down, it is apparent that this was a solid year for new exchange traded products. Over 150 ETFs have come to market this year and as of Dec. 11, 17 had over $100 million in assets under management while several others were within striking distance of that total.
The Barclays ETN + Enhanced Global High Yield ETN (NYSEArca: FIGY) and the Barclays ETN + FI Enhanced Europe 50 ETN (NYSEArca: FEEU) have spent time in the neighborhood of $1 billion (or more) in AUM. [Some New ETFs Off to Fast Starts]
A notable trend has been spotted with some ETFs that debuted this year. That being a higher number of funds coming to market with robust amounts of seed capital. For example, the Vident International Equity Fund (NasdaqGS: VIDI) had almost $485 million in AUM as of Dec. 20 due in large part to a successful seed capital process.
“One other trend that has emerged in 2013 and that is present in the largest launches of the year involves ETPs that were launched with unusually high levels of seed capital or those that were rolled out for a specific investor,” noted Morningstar analyst Robert Goldsborough. “Similarly, high levels of seed capital helped land several other ETPs on the list, including Vident International Equity (VIDI) and two iShares factor ETFs devoted to quality and momentum factors.”
Those iShares ETFs include the iShares MSCI USA Momentum Factor ETF (NYSEArca: MTUM) and the iShares MSCI USA Quality Factor ETF (NYSEArca: QUAL). MTUM has $191.4 million in AUM while QUAL has $257.5 million. [New Factor ETFs Show Strength]
MTUM is part of a three-ETF suite of factor-based funds launched by iShares in April. Each was developed at the request of the Arizona State Retirement System, which seeded each ETF with $100 million. The other members of that trio are the iShares MSCI USA Size Factor ETF NYSEArca: SIZE) and iShares MSCI USA Value Factor ETF (NYSEArca: VLUE). SIZE has over $120 million in assets.
Morningstar points out that most of the successful product launches this year are equity-based funds, though some rookie bond ETFs have thrived, including the Vanguard Total International Bond ETF (NasdaqGS: BNDX) and the actively managed SPDR Blackstone/GSO Senior Loan ETF (NYSEArca: SRLN), both of which rank among the top-five most successful new ETFs in terms of assets gathered.
SPDR Blackstone/GSO Senior Loan ETF
ETF Trends editorial team contributed to this post.
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.