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SIX Swiss Exchange has welcomed its first actively managed exchange-traded funds (ETFs). The launch of a range of active products from Swiss & Global Asset Management means that both active and passive ETFs are now available on the exchange.
The Zurich-based exchange has hosted conventional passive ETFs – index-linked funds which are designed to closely replicate their underlying index – for more than 10 years and is home to more than 900 passive ETFs. In 2013, these ETFs accounted for turnover of CHF 90,728 million, representing a market share of around 15% in Europe.
Active ETFs represent a huge opportunity for exchanges as traditional active mutual fund managers look to capitalise on the demand for exchange-traded products by rolling out exchange-traded versions of their funds. Managers of active funds are not beholden to an index and are able to use their discretion to respond to market trends and to attempt to profit from potential mispricing opportunities. With active ETFs, investors are able to access these potential benefits while also enjoying the advantages of on-exchange trading, such as security, transparency, continuous trading and pricing by market makers.
Issuers of active ETFs on the exchange must calculate the indicative net asset value (iNAV) on a regular basis and send this to SIX Swiss Exchange. They must also notify SIX Swiss Exchange of the current portfolio composition on a daily basis. Issuers must also publish the calculation method for the iNAV and, with a four-week delay, the complete portfolio composition on their own website.
Stephan Meier, spokesperson for SIX Swiss Exchange, said: “We are delighted to launch actively managed ETFs on SIX Swiss Exchange. We have been part of the European ETF market for more than a decade, and today’s launch represents the next step in our commitment to the sector. Combining the liquidity and tradability of ETFs with the potential strengths of active management, actively-managed ETFs meet a clear demand for investors.”
He added: “By trading through SIX Swiss Exchange investors are assured of best in class standards of security and transparency combined with the benefits of continuous trading and pricing by market makers.”