Behind-the-scenes, exchanges work closely with ETF providers to bring new and exciting strategies to retail investors, advisors and institutional traders.
The New York Stock Exchange, one of four exchanges in the U.S. that lists exchange traded products, has been enjoying months with record new number of ETPs being listed.
“We’ve got unique and innovative products that are still coming to market,” Douglas Yones, Head of Exchange Traded Products for the NYSE, said at the Inside ETFs 2018 conference.
For example, on Thursday, Direxion launched the Direxion Daily Robotics, Artificial Intelligence & Automation Index Bull 3X Shares (NYSEArca: UBOT).
Yones explained that there is also opportunity ahead to combine mutual funds and ETFs to take the best of both worlds, which could potentially tap into a $9 to $12 trillion market. However, to date, no one has been able to effectively do so because active managers have been loath to disclose their secret sauce through the transparent nature of the ETF structure.
“In partnership with Natixis, we filed with a new product structure. They’re going to license this from the New York Stock Exchange, and it is for a periodically disclosed portfolio,” Yones said.
The new structure will trade in price on the exchange but will only need to disclose underlying holdings on a periodical basis, which should help attract more active managers into this fund structure and help make investing more efficient for trillions of dollars in investment money that is still allocated in mutual funds.
“Assuming we see the regulatory approval, yes it would trade like any other ETF on the New York Stock Exchange,” Yones added.
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