In the asset management space, the relationship between active exchange-traded funds (ETFs) and active mutual funds is rather like that uneasy relationship between the older generation and the kids. Those new and shiny active ETFs promise all the benefits of skilled and experienced management on the cheap. The question is, can both products exist under one roof? Or will the young upstarts kick the old guard out onto the heath?
Why institutional trades might be harder for APs.
William Tsotsos has joined Old Mutual Asset Management, the U.S.-based global asset management business of Old Mutual plc, as senior vice-president and head of Canada.
Active exchange-traded funds (ETFs) are critical to the future of the industry. However, Knight Capital’s Reginald Browne says, when it comes to institutional trades, active ETFs are a bit more challenging for a market-maker.
Global bonds in an era of hyperactive monetary policy.
In the eyes of many regulators, exchange-traded funds (ETFs) are seen as interlopers in the investment world. ETFs have been the subject of studies and speeches blaming them for all forms of market distortions, malfunctions and outright crashes. But there are signs that the ice is melting and that regulators are slowly but surely warming up to ETFs. The U.S. Securities and Exchange Commission finally approved the use of derivatives for active ETFs, which rely on manager skill to outperform rather than just passively tracking an underlying index.
The active exchange-traded fund (ETF) space is set to grow exponentially this year. What's interesting is that it's growing along different tracks in Canada and the U.S. as fixed income ETFs continue to play a bigger role in the pension space south of the border.
Pension funds and other institutional investors have been going further afield in the hunt for yield, moving further into emerging market debt, mainly on the sovereign side. But as the sovereign space becomes more crowded, the growing corporate debt market is becoming a more viable way for investors to get exposure to emerging market debt.
It’s tough out there for exchange traded fund (ETF) providers. At a time when total ETF assets are surging to new highs, profitability is proving elusive for some. Last month, Russell Investments closed its passive ETFs after just two years in the business. The firm’s choice to throw in the towel is hardly surprising given a new report from the Financial Times. The report finds that more than a quarter of ETFs and notes listed in the U.S. haven’t attracted enough assets to be economically viable.
Plan sponsors are coming to grips with the realities of a challenging global marketplace as they face severe market volatility on one side, and major global economic imbalances on the other.