The journey from developing a compelling investment thesis to launching an ETF can be an arduous one indeed. While the rewards for a truly unique ETF can be substantial, the upfront work and attention to detail that are required to make an ETF concept a reality often appear daunting to new issuers that are just dipping their toes into the ETF industry for the very first time.
With this in mind, we teamed up with ETF Trends and a variety of experienced service providers from around the ETF space to produce an overview of the most important recipes for success for new ETF issuers. The result is “Big Tips for New Issuers,” a free print magazine (available online in pdf), aggregating insights from experts in indexing, research, marketing and PR, trading, legal, listings, sales, and advertising.
What follows are a few brief excerpts from a selection of submissions, highlighting some key points from the publication. To download the full magazine, be sure to visit http://bigtips.co
1.) ETF Sales and Distribution is an awful lot like a ladder: you’ve got to climb it one “rung” at a time
“Getting past the gatekeepers and developing initial interest in new ETFs is where sales creativity matters the most,” writes Guillermo Trias of Toroso Investments in his submission, A Better Approach to ETF Sales and Distribution. “There are three main audiences for ETFs,” he continues, “which should be targeted in this order: retail, allocators, and institutional clients.” It is only once sufficient assets and liquidity have been garnered at the first “retail” rung that an ETF Issuer’s sales efforts should be re-oriented towards allocators, and then institutions.
2.) Timing is everything
“You need to launch the right product at the right time in the right market conditions,” writes Mohit Bajaj, Head of ETF Trading Solutions at WallachBeth Capital, in his submission Growing Healthy ETF Liquidity From Day One. “It will be nearly impossible to successfully gather interest in a new high yield bond ETF when Carl Icahn is on CNBC telling the world that the junk bond market is going to collapse.” Bajaj goes on to provide a survey of other important tactics new issuers can utilize to ensure their ETF’s liquidity is at a nominal level after they launch.