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ETFGI Reports Active ETFs In The U.S. Celebrate Their 12th Anniversary

Date 26/03/2020

ETFGI, a leading independent research and consultancy firm covering trends in the global ETFs and ETPs ecosystem, twelve years ago, on March 18, 2008 the first active ETF was listed in the US - the Bear Stearns Current Yield Fund (AMEX: YYY).   The response from many at the time was – Why do we need Active ETFs? 

Twelve years later that ETF does not exist but there are now 802 Active ETFs/ETPs listed globally, with 1,025 listings, assets of US$167 Billion a new record high, from 156 providers listed on 24 exchanges in 17 countries

During February, actively managed ETFs and ETPs gathered net inflows of US$6.10 billion during February, bringing year-to-date net inflows to US$12.30 billion. Assets invested in actively managed ETFs/ETPs finished the month up 2.0%, from US$163.61 billion at the end of January to US$166.84 billion, according to ETFGI's February 2020 Active ETFs and ETPs industry landscape insights report, an annual paid-for research subscription service. (All dollar values in USD unless otherwise noted.)

Highlights

  • Active ETFs in the U.S. celebrate their 12thanniversary
  • Twelve years ago, on March 18,2008 the first active ETF was listed in the US - the Bear Stearns Current Yield Fund (AMEX: YYY)
  • Actively managed ETFs and ETPs gathered net inflows of US$6.10 billion during February
  • Year-to-date net inflows of $12.30 billion that actively managed ETFs/ETPs gathered is the highest on record.
  • Assets invested in actively managed ETFs/ETPs reached a new record of $166.84 billion.
  • Will we see a wave of new issuers and new products come to market in 2020 in the US due to recent SEC approval of Non-transparent Active ETFs or Active Non-transparent “ANTs”, Semi-transparent, periodically disclosed active ETFs “PDAs” (these products will disclose their holdings at least quarterly like a mutual fund)  

Twelve years ago, on March 18,2008 the first active ETF was listed in the US - the Bear Stearns Current Yield Fund (AMEX: YYY).  In the US all ETFs are required to disclose their holdings on a daily basis.   The move toward non-transparent ETFs, has been in the works by issuers for over 11 years.   The movement is mostly being driven by product providers/issuers rather than demand from institutional investors, financial advisers and end retail investors. 

On February 26, 2016, Eaton Vance launched NextShares, Exchange Traded Managed Funds, a hybrid between mutual funds and ETFs, which are not required to disclose their investments every day. ETFMs are priced on a plus or minus NAV basis at the end of the day which requires brokers to upgrade their technology to accommodate a different trading method.

The SEC has recently approved a number of Non-transparent Active ETFs or Active Non-transparent “ANTs”, Semi-transparent, or periodically disclosed active ETFs “PDAs” (these products will disclose their holdings at least quarterly like a mutual fund).   On April 4, 2019 the SEC approved Precidian’s ActiveShares non-transparent Active ETF model which uses an Authorised Participant Representative to keep the holdings in the ETF confidential.   On November 14, 2019, the SEC issued notices to Blue Tractor, Fidelity, Natixis and T. Rowe Price approving four “proxy basket” active semi-transparent ETFs.  Two other models by EatonVance and Invesco are still pending with the SEC. As of today we have not seen any products listed using these new models.  

Will we see a wave of new issuers in 2020 bringing products to market using these new models, what types of products will be offered, how will they be priced, where and how will they be distributed and who will be the users of these products.

Will issuers create clones of existing mutual funds, will they launch new strategies or will issuers convert existing mutual funds into ETFs. In the US we have not yet seen a mutual fund converted into an ETF.   Syntax has converted 2 private funds into ETFs carrying over 5 and 4 years of performance and assets in their Syntax®Stratified LargeCap ETF SSPY and Syntax®Stratified MidCap ETF SMPY.  Credit Suisse reappeared as an ETF on March 16, 2020 after the firm sold its ETF business to BlackRock iShares back in 2013 converting 3 existing index funds into ETFs. Credit Suisse converted their SMI index fund into an ETF when they first entered the ETF industry.

“At the end of February, the S&P 500 was down 8.2% as coronavirus cases continued to spread and the potential economic impact weighed on investors and the markets. Outside the U.S., the S&P Developed ex-U.S. BMI declined nearly 9.0%.  The S&P Emerging BMI lost 5.1% during the month. Global equities as measured by the S&P Global BMI ended down 8.1% with 49 of 50 included country indices down, while China gained 0.9%.” According to Deborah Fuhr, managing partner, founder and owner of ETFGI.

Growth in actively managed ETF and ETP assets as of the end of February 2020

ETFGI_US_ETF_20thAnniv_2020

February, bringing net inflows for the year 2020 to $8.92 billion, more than the $2.9 billion in net inflows Fixed Income products had attracted at this point in 2019.  Equity focused actively managed ETFs/ETPs listed globally attracted net inflows of $1.8 billion during February, bringing net inflows for the year 2020 to $2.8 billion, which is greater than the $1.1 billion in net inflows equity products had attracted at this point in 2019.

Substantial inflows can be attributed to the top 20 ETFs/ETPs by net new assets, which collectively gathered $4.32 billion at the end of February.  JPMorgan Ultra-Short Income ETF (JPST US) gathered $714.64 million alone.

Top 20 actively managed ETFs/ETPs by net new assets February 2020

Name

Ticker

Assets
(US$ Mn)
 Feb-20

NNA
(US$ Mn)
 YTD-20

NNA
(US$ Mn)
 Feb-20

JPMorgan Ultra-Short Income ETF

JPST US

11,590.39

1,348.03

714.64

PIMCO Enhanced Short Maturity Strategy Fund

MINT US

14,827.35

1,068.90

449.03

iShares Short Maturity Bond ETF

NEAR US

6,889.68

400.11

385.09

Hwabao CSI Technology Leading Enterprises ETF

515000 CH

1,876.63

609.36

351.69

First Trust Low Duration Mortgage Opportunities ETF

LMBS US

5,084.06

1,069.37

290.01

PGIM Ultra Short Bond ETF

PULS US

1,090.49

292.90

211.56

CI First Asset High Interest Savings ETF

CSAV CN

1,488.90

405.38

204.88

First Trust Preferred Securities and Income Fund

FPE US

5,412.46

458.00

204.61

iShares Liquidity Income ETF

ICSH US

3,061.61

418.21

198.97

PIMCO Euro Short Maturity Source UCITS ETF

PJSR GY

606.94

197.04

166.71

ARK Innovation ETF

ARKK US

2,159.39

210.58

142.01

FT Cboe Vest US Equity Deep Buffer ETF - February

DFEB US

123.38

125.43

125.43

Janus Short Duration Income ETF

VNLA US

1,335.79

268.98

122.37

JPMorgan U.S. Aggregate Bond ETF

JAGG US

543.06

199.25

121.45

Franklin Liberty High Yield Corporate ETF

FLHY US

166.25

117.07

117.07

First Trust TCW Opportunistic Fixed Income ETF

FIXD US

1,588.95

285.38

113.48

Guotai CSI Computer Theme ETF

512720 CH

162.82

87.23

108.23

First Trust Enhanced Short Maturity Fund

FTSM US

5,088.69

129.31

99.27

Horizons Cash Maximizer ETF

HSAV CN

98.36

97.76

97.76

FT Cboe Vest US Equity Buffer ETF - February

FFEB US

90.46

93.57

93.57

 

Investors have tended to invest in actively managed Fixed Income ETFs/ETPs during February.