Large asset managers and mutual fund issuers look to enter the ETF market

This report aggregates newly launched funds in September and highlights the performance of funds launched in August.

• September adds 40 new ETFs as three new issuers enter the market
• 31 funds were launched in the Americas, six funds were added in Europe and the remaining three were listed in Apac
• 13 of the funds use a proprietary weighting methodology instead of a market cap weighting

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September new listings

Mutual fund issuers are beginning to turn to ETFs as an area of growth that can provide additional liquidity to their strategies. In addition, large asset managers who were previously not in the ETF space or who had a relatively small presence are now looking to accelerate their growth in ETFs. Goldman Sachs, JPMorgan and John Hancock all released funds in September and have also alluded to more launches down the road.

These new entrants into the ETF market have brought with them varying investment strategies as well as weighting methodologies. When entering into a well-covered market, issuers look to find any method of diversification that could possibly provide their fund with superior performance and thus attract investor assets. This has been exceedingly noticeable in the numerous weighting methodologies that have been created over the past year. Although market-cap weighted portfolios are still the norm, September saw a large percentage of funds added with proprietary weighting or smart beta methodologies in an attempt to win investor favour with a unique strategy.

August flows

The 33 funds launched in August have gained a total of $357m since their inception. The fixed income funds outpaced the other asset classes by adding $219m.

Out of the funds that were listed in the Americas, Newfleet Multi-Sector Unconstrained Bond ETF (NFLT) has seen the largest amount of inflows with nearly $150m in new assets since its inception in August.

August only had three new ETF listings outside of the US. The First Trust US IPO Index UCITS ETF (FPXU) listed in France gained $2m in assets.

Other notable asset flows went towards the iShares S&P US Mid-Cap Index ETF (CAD-Hedged) (XMH) which focuses on US mid-cap stocks while hedging to the Canadian dollar. The fund gained $87m in new assets since it began trading in early August.

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James Hohorst, ETF Analyst, Markit
Tel: +1 646 679 3012
james.hohorst@markit.com

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This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.