Alternative ETFs still number one for BNY Mellon
22 October 2015 New York
Image: Shutterstock
Alternative and derivatives strategies continue to be the most popular new products in 2015 so far, making up 25 percent of all BNY Mellon’s exchange traded funds (ETFs) launched between 1 January and 30 September.
This is a continuation of the trend from 2014, which also saw these strategies making up a quarter of new launches.
By contrast, actively managed ETFs made up 25 percent of new launches in 2014, and only 5 percent in 2015.
Steve Cook, business executive for structured product services at BNY Mellon, attributed this drop to pending regulatory rulings in this part of the ETF market.
He said: “Many firms with these active offerings in the pipeline are awaiting the outcomes on these rulings before moving ahead. We expect a significant upswing in actively managed ETF launches once the new regulations become clear.”
Smart beta ETFs accounted for 12.5 percent of new launches in the first nine months of 2015, compared to 4.4 percent in the same period in 2014, and fixed-income ETFs made up 6.25 percent in 2015.
Cook said: “Growing interest from registered investment advisors looking for downside protection appears to be an important driver of the growth of alternatives-based ETFs.”
“In addition, the possibility of rising interest rates has advisors looking for alternatives to fixed income investments. The structure and tax efficiencies of ETFs enhance the attractiveness of this type of investment.”
In total, BNY Mellon serviced 64 new funds in the nine-month period.
This is a continuation of the trend from 2014, which also saw these strategies making up a quarter of new launches.
By contrast, actively managed ETFs made up 25 percent of new launches in 2014, and only 5 percent in 2015.
Steve Cook, business executive for structured product services at BNY Mellon, attributed this drop to pending regulatory rulings in this part of the ETF market.
He said: “Many firms with these active offerings in the pipeline are awaiting the outcomes on these rulings before moving ahead. We expect a significant upswing in actively managed ETF launches once the new regulations become clear.”
Smart beta ETFs accounted for 12.5 percent of new launches in the first nine months of 2015, compared to 4.4 percent in the same period in 2014, and fixed-income ETFs made up 6.25 percent in 2015.
Cook said: “Growing interest from registered investment advisors looking for downside protection appears to be an important driver of the growth of alternatives-based ETFs.”
“In addition, the possibility of rising interest rates has advisors looking for alternatives to fixed income investments. The structure and tax efficiencies of ETFs enhance the attractiveness of this type of investment.”
In total, BNY Mellon serviced 64 new funds in the nine-month period.
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