Actively managed ETFs in the US eclipse USD250bn in AUM
Industry participants often cite liquidity, costs, transparency, and the relative tax advantages of exchange-traded funds (ETFs) as catalysts for the broad adoption of the structure over the past three decades. Until recently, actively managed versions of ETFs were scarce, but growth has accelerated since the adoption of Rule 6c-11 (also known as "The ETF Rule") by the SEC in September 2019.
The ETF Rule provided a clear and consistent framework for active managers to take advantage of the ETF structure, and less than two years later the number of actively managed strategies and assets have more than doubled. There are currently more than 600 Active ETF strategies listed in the US, while assets under management recently crossed the USD250 billion milestone.
Changebridge Capital, a Boston-based asset manager of active ETFs anticipates increased interest amongst issuers and investors alike. The team listed the Changebridge Capital Long/Short Equity ETF as well as the Changebridge Capital Sustainable Equity ETF on the NYSE Arca in 2020.
"Increased competition and innovation in the ETF marketplace have led to more choices for investors. These are precisely the intentions cited by the SEC when the ETF Rule was introduced," says Changebridge's Founder, Ross Klein.
Douglas Yones, Head of Exchange Traded Products at the New York Stock Exchange notes: "ETFs have become an investment vehicle of choice for investors worldwide, and with over USD50 billion in year-to-date net cash flow, Active ETFs are a significant part of the industry growth story here at the New York Stock Exchange."
Changebridge's Co-Founder, Vince Lorusso, directly connects the firm's own product innovation with the growing appetite for actively managed ETFs.
"Our firm is guided by our investment process and client-centric approach, so the potential to integrate our style of active management in the ETF structure was compelling. As a result, investors can access our Sustainable Equity ETF and our Long/Short Equity ETF with daily holdings transparency, intraday liquidity, and the potential tax advantages of the ETF structure. We are thrilled to be part of the innovation that is taking place in the Active ETF landscape," said Lorusso.