When the Nasdaq Stock Market closes out the first quarter today it will have added an impressive list of 25 new ETF products.
Of those, 12 products were switches off of NYSE ARCA onto Nasdaq – 10 iShares and two Van Eck ETFs.
The first NextShares ETF from leading global asset manager Eaton Vance began trading Feb. 29; they launched two additional NextShares ETFs today.
The competition for listing ETFs is heating up between Nasdaq, the New York Stock Exchange and Bats Global Markets.
Expect more aggressive ETF moves from Nasdaq and NYSE after Bats announced Tuesday it had acquired ETF.com — a data, news and analysis website.
As the fight for ETF listings heat up, Jeff McCarthy, Vice President and Head of ETP Listings at Nasdaq shared that on or around April 8 – Nasdaq will complete the switch of the US size and style family of 12 First Trust AlphaDEX ETFs from NYSE ARCA to Nasdaq.
This will represent the biggest group of switches of all AlphaDEX products they have completed to date (switched 17 of their products last year).[related_stories]
Included in the 12 is their most popular US size/style product with $1.5 billion in AUM: the First Trust Large Cap Core AlphaDEX Fund (FEX). Additionally, not only is Nasdaq the index provider for the family of products, but the indexes are also branded as Nasdaq.
Dave Gedeon, Head of Research & Development at Nasdaq Global Indexes and his team managed the creation of the Nasdaq AlphaDEX indexes, which are multi-factor. He wrote earlier this month that Smart Beta Investing has become the latest trend, but pointed out factor-based investing has existed for decades.
Gedeon said Smart Beta Investing’s momentum factor was generally viewed as the opposite of volatility.
“A relative strength or momentum strategy picks stocks that have historically outperformed the market as studies show that this outperformance is likely to continue in the short to medium term,” Gedeon wrote on March 11. “Much research has been done on this factor, and it is important to be able to harness momentum in the right market environment.”
Gedeon added that utilizing a relative strength overlay on powerful single factors drastically improved return and lowered volatility yielding a strong information ratio.
He said this investment thesis also solved the problem of when to be invested and for how long.
As of March 15 there was $2.13 trillion invested in 1869 ETFs. Of that, the largest 100 held 75% of the assets, and of that, 10 held 27% of all ETF assets, according to FactSet.
Nasdaq’s Q1 ETF Listings: