MMid-tier asset managers such as JPMorgan Asset Management, Fidelity and Capital Group Cos. looking to gain traction in the global exchange-traded fund industry realize that active management will be key to growing their business and gaining a stake in the big three established ETF providers BlackRock, Vanguard and State Street Global Advisors.
“If you are a former mutual fund manager trying to enter the ETF market, obviously you need to use your active abilities to come up with your strategy, preferably in a transparent ETF structure,” Daniil said. Shapiro, associate director of product development at Cerulli. Associates, told Pensions & Investments before adding, “if you’re a former mutual fund manager, you want to offer an active strategy.”
As fund managers known for mutual funds build their ETF lines, Todd Rosenbluth, head of research at VettaFi, said we should expect companies like Capital Group, which launched its first suite of active ETFs in February, are among the top 25 ETFs. suppliers in five years.
“In recent years, asset managers with a proven track record of stock picking through active management have crushed the ETF party and made inroads,” Rosenbluth said. “Rather than competing with the top three ETF providers on cost, they provided differentiation with their investing approaches.”
Already, mid-tier managers like JPMAM are seeing their ETF business grow at a faster rate than the Big Three. JPMAM held $78 billion in ETF assets globally as of December 31, up 57.4% from a year earlier. Vanguard’s global ETF assets, meanwhile, reached $2.21 trillion as of December 31, up 38% from a year earlier. SSGA posted a growth rate of 30.1% with $1.18 trillion in assets, while BlackRock ended 2021 with $3.27 trillion in ETF assets, up 22.4% from to the previous year.
About half of JPMAM’s AUM ETFs were in active funds, with most new products being developed around active ETFs.
JPMAM announced plans in August to convert four of its mutual funds into active ETFs. The manager has completed three such conversions, with the fourth due on June 10.
“Actively managed ETFs in 2021 represented about 10% of industry flows and about 4% of assets,” JPAM’s global head of asset management solutions, Jed Laskowitz, told P&I. “So the interest in active ETFs (is) growing.”
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