Multi-asset exchange traded funds have proven popular with investors in the U.S. due in part to a combination of robust yields and exposure to several income-generating asset classes under one umbrella.
ETF sponsors are now looking to test the appetite for multi-asset funds in the U.K. market. Nick Brooks, head of research and investment strategy at ETF Securities, told Nick Reeve of the Financial Times that multi-asset ETFs could debut in the U.K. as soon as March.
The FT reports that just one multi-asset ETF, the db x-trackers SCM Multi-Asset Ucits ETF, currently trades in London. That product is actively managed, but ETF Securities is reportedly eying a passively managed multi-asset ETF.
It appears other providers think the idea of U.K.-listed multi-asset ETFs is sound, but that does not mean they will rush to bring new product to market.
Most multi-asset ETFs that trade in the U.S. feature exposure to some combination of common stocks, master limited partnerships (MLPs), closed end funds, real estate investment trusts (REITS), preferred stocks, high-yield bonds and other asset classes. [Multi-Asset ETFs Get Some Interest Rate Relief]
Popular members of the group include the $1.1 billion Guggenheim Multi-Asset Income Index ETF (NYSEArca: CVY) and the First Trust NASDAQ Multi-Asset Diversified Income Index Fund (NasdaqGS: MDIV). MDIV has attracted $536.1 million in assets since its August 2012 debut.
Other multi-asset ETFs currently available to U.S. investors include the iShares Morningstar Multi-Asset Income ETF (NYSEArca: IYLD) and the Guggenheim International Multi-Asset Income Index ETF (NYSEArca: HGI).
Guggenheim Multi-Asset Income Index ETF
ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of CVY.