New ways with ETFs

ETF Express took on the new developments in the US and Europe of ETF inclusion as a separate share class alongside mutual funds or unit trusts this week. A patent held by Vanguard which allowed the creation of an ETF share class of an existing 40 Act mutual fund. lapses this month, allowing a new raft of hybrid products to be launched.

BNY Mellon’s Ben Slavin commented for ETF Express on whether this will impact the massive trend of mutual fund to ETF conversions. "My expectation is that the mutual fund to ETF conversion trend will continue, but early asset gathering results and complexity for asset managers may limit the acceleration of this trend," Slavin says.

In Europe, HSBC Asset Management recently announced the name changes of four HSBC Fixed Income index funds as it prepared to launch new ETF share classes, designed to provide investors with access to both listed and unlisted share classes through a single fund. In Europe, and of course, the UK, there are a few extra hoops for issuers to go through to establish a hybrid product. A&L Goodbody’s Stephen Carson explains all in the piece, but overall says: "I think it will create another avenue for non-ETF managers to dip their toe into the ETF market."

This week also saw the publication of the annual global survey of ETFs from Trackinsight, ETF Express’s data partners. The research found that investors are increasingly open to active strategies; the percentage of respondents already using active ETFs is higher than ever, the firm says, and switching from mutual funds to active ETFs is trending. Nearly 80 per cent of respondents in the Americas stated they would be more inclined to invest in an active strategy if packaged as an ETF rather than a mutual fund.

I will be speaking and chairing a number of ETF sessions at Informa’s Impower Fund Forum in Monte Carlo 27th and 28th June, 2023.

The agenda is here, and I am very pleased to be able to offer my readers a 10 per cent discount on tickets, using this link or this discount code FKN3253EMSPK.

Beverly Chandler, Managing Editor

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