The dramatic volatility in global markets made issuers in the almost $4 trillion exchange-traded fund industry slam the brakes this month.
As the coronavirus pandemic roiled the world, only four new ETFs started trading in March -- the slowest pace since August, according to data compiled by Bloomberg. That’s a steep drop from the 29 funds that were launched in February, the best month since November 2017.
The reason behind the decline is simple: Companies are refraining from ETF debuts amid market turbulence. In addition, it’s harder for salespeople to market their new products when self-isolation measures are making it impossible to hold face-to-face meetings, according to UBS Global Wealth Management’s David Perlman.
“Given the market volatility and just the environment we’re in, it’d be pretty hard to raise assets,” Perlman said. “Advisers and analysts have more pressing issues than reviewing a brand new strategy right now.”
Innovator has been one of the few issuers to brave the waters in March, with a trio of U.S. stock “buffer” ETFs that seek to shield investors from a certain percentage of losses. The Esoterica NextG Economy ETF (WUGI) launched Tuesday.
Amid all the uncertainties, it may be hard to predict the trend of ETF debuts next month. But one issuer, American Century, said Tuesday that the American Century Focused Dynamic Growth ETF and the American Century Focused Large Cap Value ETF -- the first active nontransparent ETFs -- will begin trading Thursday.
The fact that the company delayed the launch of these new types of funds was likely to their benefit, according to Bloomberg Intelligence’s Athanasios Psarofagis. American Century said in May that it would license Precidian’s intellectual property for active nontransparent ETFs, after regulators cleared a pathway for the products in the previous month. The plan to launch Thursday likely shows they think markets will stabilize from here, Psarofagis said.
“They are making a market call and hoping to catch an updraft,” said Psarofagis, an ETF analyst. “Since these are active, their performance track record is going to be key.”
With plans to retire, the outgoing president of the Texas-based IBD giant will be replaced by the giant RIA's current head of wealth management this spring.
The VIX, or so called "fear index," is shifting higher with increased market volatility, causing wealth managers to ready themselves for anxious client calls.
Canadian bank's capital markets arm reportedly failed to detect representatives' misleading disclosures involving $3 billion of mortgage-backed "sliver bonds" sold over a multi-year period.
Move marks the largest single batch of exits as the Franklin Templeton subsidiary continues to navigate fallout from alleged breaches by star manager Ken Leech.
The serial RIA acquirer's latest partnership gives it another foothold in California's high-net-worth space within Bay Area.
AssetMark Group CEO explains why the great wealth transfer, succession planning, and personalization will be key for advisors in the new year.
A trust delivery model not only increases the value of an advisor and a firm but is also a natural addition to any firm’s succession plan.
