With US equity markets trading sideways in a horizontal band in the last few months, international markets continue to become increasingly appealing to investors. From a macro perspective, many economies outside of North America and Europe do indeed look quite a lot more promising than the US, both in terms of their fiscal position, their growth prospects and other fundamentals.
Archive for July, 2010
RiverPark Advisors first came into the spotlight as a sub-advisor on four actively-managed ETFs launched by Grail Advisors back Oct 2009. In Feb 2010, RiverPark chose to file with SEC to launch its own actively-managed ETF, on what we suggested may be the start of sub-advisors stepping up and going to market by themselves. On July 29th, RiverPark filed an amended 40-APP with the SEC which included some changes in the proposed “initial funds” that RiverPark is looking to launch.
On 28th July, Horizons AlphaPro began trading another new actively-managed ETF on the Toronto Stock Exchange called the AlphaPro Global Balanced ETF (HAA). This new fund will look to provide a consistent rate of return through current income and long-term capital growth, achieved by investing Canadian equities, income trusts and debt securities.
On July 22nd, ALPS Advisors filed a preliminary prospectus for an actively-managed ETF that will focus on investing globally in fixed-income securities. The fund will be called the RiverFront Strategic Income Fund. ALPS Advisors was one of the first companies to actively market ETFs to the financial adviser community when ETFs were first launched in the US in the 90s. ALPS currently manages $92 million in ETF assets as of June 2010.
In a report published by State Street Global Advisors (SSgA) called “Vision Focus”, SSgA discusses actively-managed ETFs and the resulting changes that they have brought to the ETF landscape and how ETFs are serviced. The report focused on several important points about Active ETFs and one of them was that “actively and passively managed ETFs should be able to co-exist because they fill different needs in investors’ portfolios”.
Roger Nusbaum, who runs the popular blog Random Roger, wrote in a post today that one area in which an actively-managed ETF could add some value is the financial sector. Roger makes the point that the financial sector is exactly the type where some active management would be beneficial to investors because of the number of potentially bad bets out there amongst banks. I couldn’t agree more.
On July 21st, two more actively-managed ETFs began trading, one in the US and one in Canada. AdvisorShares’ long-awaited WCM/BNY Mellon Focused Growth ADR ETF (AADR) debuted on the NYSE and became the first Active ETF to focus on a portfolio of American Depository Receipts (ADRs). In Canada, Horizons AlphaPro launched its 8th actively-managed ETF on the Toronto Stock Exchange, called the Horizons AlphaPro Global Dividend ETF (HAZ).
There is little doubt that the Active ETF space is attracting a lot of attention both from investors and investment managers, and according to Financial-Planning.com author Ruthie Ackerman, maybe even too much attention considering how small this market is relative to the overall ETF universe. Tom Graves, an analyst at S&P who spoke to Financial Planning, believed that this category of ETFs is likely to grow further and is showing some momentum.
