The development is seen as a setback for fund companies considering folding their mutual funds into active ETFs.
Huntington, a unit of Huntington Bancshares (NasdaqGM: HBAN), earlier this week launched its first ETF, Huntington EcoLogical Strategy ETF (NYSEArca: HECO). [Huntington Lists First ETF]
The firm plans to launch the Sector Rotations ETF next month and Bateman said Huntington will ensure the new ETF is not exactly like the mutual fund so that it does not “cannibalize” assets, Reuters reported.
“We had wanted to be able to promote the track record of the fund with the new ETF and allow investors to do a tax-free exchange, but sometimes you have to just capitulate and move forward,” he said in the story.