On a seemingly monthly basis this year, actively managed exchange traded funds are topping previously set assets under management records.
Further confirmation of that comes by way of the increasing number of vaunted fund managers with deep legacies with actively managed mutual funds that are entering the ETF arena. Some are choosing to do that via active semi-transparent ETFs. Add John Hancock Investment Management to that list.
In a statement released Wednesday, the Boston-based fund giant said it’s partnering with Bean Town neighbor Fidelity to bring semi-transparent ETFs to market.
“Fidelity’s active equity ETF model employs an innovative ‘tracking basket’ methodology, which maintains the benefits of the ETF structure, provides information to market participants to promote efficient trading of shares, and preserves the ability to add value through active management,” according to the statement.
Fidelity has already moved into the semi-transparent arena. In February, the issuer brought the Fidelity Growth Opportunities ETF (FGRO); the Fidelity Magellan ETF (FMAG); the Fidelity Real Estate Investment ETF (FPRO); and the Fidelity Small-Mid Cap Opportunities ETF (FSMO) to market.
In June 2020, the fund giant launched the Fidelity Blue Chip Growth ETF (FBCG), Fidelity Blue Chip Value ETF (FBCV), and the Fidelity New Millennium ETF (FMIL). All of these products are classified as semi-transparent ETFs, meaning the holdings are not disclosed to investors on a daily basis.
Issuers with decades of active management experience and expertise undoubtedly see the tidal wave of support for ETFs among advisors, institutional investors, and retail investors. However, divulging the “secret sauce” of what makes successful active funds tick isn’t appealing to many fund companies. Semi-transparent ETFs help those issuers split the difference.
“As the ETF landscape continues to evolve, with investors becoming more aware of the potential benefits of the semi-transparent ETF structure, we are pleased to have the opportunity to develop the capability and plan for the future ETF investor,” said Steven L. Deroian, co-head of retail product, John Hancock Investment Management, in the statement.
For its part, John Hancock is a force in the traditional ETF arena, with 16 funds with a combined $4.5 billion assets under management. Those offerings include fixed income funds and multi-factor broad market and sector strategies.
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.
