The actively managed exchange traded fund space is dominated by a handful of players, but the industry could quickly expand if the Securities and Exchange Commission gives the greenlight for nontransparent ETF offerings.
PIMCO, First Trust Advisors, WisdomTree Investments and AdvisorShares Investments currently dominate the active ETF space, writes Rosalyn Retkwa for Institutional Investor.
There are now about 33 actively managed ETFs with $100 million or more in assets as of October 9, compared to just 18 in September 2013. The space was bolstered in August after WBI Investments joined the ETF fray in August, adding 10 new active ETFs. [Absolute Shares Joins ETF Fray With 10 New ETFs]
Over the same period, combined assets for the category increased 15.7% to $16.9 billion from $14.6 billion, even though gains were slightly offset by redemptions out of the PIMCO Total Return ETF (NYSEArca: BOND), which dipped to $2.7 billion in assets from $3.9 billion, in response to Bill Gross’ move to Janus. [Life After Gross: BOND Adjusts Portfolio]
The losses in the active ETF space were largely limited to BOND. For instance, the PIMCO Enhanced Short Maturity ETF (NYSEArca: MINT) attracted net inflows after Gross left PIMCO and has become the largest active ETF on the market, with $3.8 billion in assets. [ETF Options to Hedge Against Falling Prices, Low Inflation]
On Oct. 9, Fidelity also launched its first suite of actively managed ETFs based off its mutual fund products, including Fidelity Total Bond ETF (NYSEArca: FBND), Fidelity Limited Term Bond ETF (NYSEArca: FLTB) and Fidelity Corporate Bond ETF (NYSEArca: FCOR). [Fidelity Makes Its Active ETF Debut and it Could be a Big One]