More money managers, seeking to grow their assets under management, are turning to easy-to-use exchange traded funds as the go-to investment vehicle to attract investors.
Major international asset managers and niche providers are working with ETF Securities to launch products through the company’s Canvas platform, reports Judith Evans for Financial Times.
“There are a huge range of firms looking at this,” Matt Johnson, head of distribution for Europe, the Middle East and Africa at ETF Securities, said in the article. “We are in 40 to 50 meaningful dialogues with companies.”
ETF Securities’ Canvas program helps rapidly and cheaply bring ETFs on to European markets.
“Some are portfolio managers with a particular style of managing money who want to tap the [ETF] distribution channel,” Johnson added. “Others are US firms thinking about bringing exchange traded products to Europe for the first time.”
As regulatory changes come into effect over in European markets, retail use of ETFs will likely increase. Additionally, more asset managers will seek to launch their own ETFs due to the investment tool’s broad appeal.
“ETFs are growing faster than many other products, expanding into new asset classes and being used in new and different ways,” Deborah Fuhr, managing partner at ETFGI, said in the article. “Many firms are looking at how they could or should participate.”
Fuhr argues that through white-label partnerships, asset managers can quickly and efficiently bring an investment strategy to market as an ETF. [Hedge Fund Strategies Could Bolster ETF Growth]
“You need a capital markets team, a dedicated sales force, knowledge of the legal issues, relationships with market makers and brokers,” Fuhr said. “If you’re not set up to do this then you’re venturing into a whole new area.”
In the U.S., ETF turnkey solutions like Exchange Traded Concepts, ALPS, AdvisorShares and ETF Issuer Solutions help go through the regulatory approval process, provide a board of directors and get an ETF listed on an exchange for a startup fee. [‘White Label,’ Turnkey Companies Help ETF Industry Expand]
For more information on the ETF industry, visit our current affairs category.
Max Chen contributed to this article.