Research from ETFGI, a leading London-based exchange-traded fund consultant, shows a record number of new product providers entering the US market in 2015. The trend highlights the effect that strong growth rates in recent years has had in attracting new entrants to the ETF industry.
More new entrants have entered the ETF space this year than in any year previous.
Between 1 January and 30 September, 19 new ETF/ETP providers launched products in the US, already surpassing the full year records of 15 new entrants recorded in 2009 and 2014.
These new providers have launched a total of 37 products (including 21 smart beta launches and 7 of the active variety), cumulatively bringing in over $1.1bn in assets under management.
The record number of new providers in the US demonstrates how asset managers are seeking to secure a presence for themselves in the ETF sphere, while a high level of demand for these products and strong growth rates should continue to attract new market participants in upcoming years. Some of the more notable new entrants this year include Goldman Sachs, John Hancock, Dimensional Fund Advisors, Principal Funds and Kevin O’Leary’s O’Shares.
The most successful gatherer of new assets was Pacer ETFs; their three Trend Pilot ETFs (which switch between equity exposure and cash-equivalents depending on momentum signals) brought in a cumulative $421m. In second place, Newfleet Asset Management’s new liquid-alternative unconstrained bond ETF drew in $129m. Tuttle Tactical Management ranks third with $111m split between two ETFs. Other notable successes included Goldman Sachs’ two smart beta launches which attracted a total of $77m and Lattice’s 4 smart beta funds, gathering $75m. Data as of 30 September 2015.
The US market may see several new entrants before year end as providers wait for approval from the Securities and Exchange Commission (SEC). A significant number of these new funds have proposed a less transparent active ETF structure, providing transparency at the same frequency as mutual funds.