May was a month where most investors saw “fear” return to the markets, the increased volatility and intra-day swings bringing back not so pleasant memories of September 2008. Major concerns in Europe as well as continued uncertainty on the stability of the US economic recovery resulted in the S&P500 going down 8.20% in the month of May. However, largely due to what could be mildly termed an “explosion” in assets for PIMCO’s Short Maturity ETF, the Active ETF sector in the US as a whole has more than doubled in size.
Archive for May, 2010
ActiveETFs | InFocus spoke with Rob Ivanoff, who is the Director of Research at Financial Products Research (FPR). Rob’s work and commentary on mutual fund trends and investments has been featured and quoted in the WSJ, Financial Times and many other publications. He chats with us about how advisors view Active ETFs, how they fit into 401(k) plans and the challenges they face to adoption.
AdvisorShares filed an amendment to its prospectus for the Peritus High Yield ETF (HYLD), on May 11, 2010, in which it provided greater details on the expense structure for the proposed actively-managed ETF and also modified the prospectus to remove the use of derivatives in the portfolio, which was previously allowed according to the last version of the prospectus.
Grail filed a registration statement for an actively-managed ETF on May 17th, 2010 called the Grail Western Asset Enhanced Liquidity ETF. Grail currently has 7 different Active ETFs on the market with 3 different sub-advisors managing those funds. The Enhanced Liquidity ETF will be with a new manager, Western Asset Management, that had more than $478 billion in assets under management as of March 31, 2010.
AdvisorShares’ only actively-managed ETF on the market, the Dent Tactical ETF (DENT) has now been around for about 8 months and till recently was the only one with an ETF of ETFs structure. DENT also has dubious honour of having the highest expense ratio of all Active ETFs, coming in at 1.56%. Now that the fund managers have had nearly 8 months to “walk the talk”, is there anything to show for it?
ActiveETFs | InFocus spoke with Paul Weisbruch, who is the VP of ETF/Index Sales and Trading at Street One Financial. Street One Financial is an ETF liquidity provider and works with advisors in helping them access liquidity and trade ETFs efficiently. Paul chats with us about a fundamental misconception about ETF liquidity, how investors can trade efficiently in seemingly illiquid ETFs and the creation/redemption process.
ONEF is an actively-managed ETF that is a fund of funds looking to achieve long-term capital appreciation by investing at least 80% of its assets in the shares of other ETFs. The fund aims to be a simple and easy way to own a global diversified, professionally managed portfolio in a single fund. The underlying ETFs that the fund invests in can be holding companies of any size in both developed and emerging markets.
U.S. One Inc, whose N1-A filing with the SEC to launch an ETF of ETFs we had previously discussed, today launched its first ETF product called One Fund (ONEF) which will be listed on the NYSE. The company had announced the finalization of ONEF through a press release on May 4th, and it also filed a “Notice of Effectiveness” with the SEC on the same date.
