Naturally, this will pave a path for other providers to walk down as well. BGI is taking their iShares target-date retirement funds and re-structuring them to fit the ETF of ETF format, reports EuroMoney.
The format is actually beneficial to the investor and removes the issue of re-balancing, which is good for a long-term investor. Positive things will come out of this decision, and it’s great to see that even during a challenging time for the markets, we’re still seeing innovation with regard to the ETF industry.
John McGuire, partner at Morgan, Lewis & Bockius, said the move will make it easier for ETF sponsors to do creations and redemptions. Previously, ETFs had to buy blocks of the actual securities that make up its underlying index.
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.