NYSE Arca Q4 2020 Quarterly ETF Report

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Happy New Year! I’m sure we can agree that it was satisfying to finally turn the corner on a year that, for so many, was marked by upheaval and loss. Between turning living rooms into virtual offices and classrooms, complying with stay-at-home orders and staying distant from friends and loved ones, the pandemic abruptly ushered in a new lifestyle for us all. And, more broadly, our communities have had to confront deep political division and renewed calls for social justice.

Yet in the face of a hard year, there was also plenty of positive change. U.S. capital markets proved invaluable in the face of uncertainty and the year ended with record-breaking IPO activity. The ETF industry proved it could maintain — and even accelerate — growth and productivity while primarily working remotely. A notable result of this continued focus and dedication is the flourishing active ETF market, which grew by more than 70% in assets under management by the end of the year. My team dubbed 2020 the “Year of Active” and, as the momentum continues, it’s fair to say it will be more than a year-long trend. So, welcome to the “Era of Active.” As the Home of ETFs, the NYSE is always on top of the latest developments as active management continues to expand. Be sure to sign up for our NYSE Active ETF Update to receive biweekly rundowns.

While we remained apart last year, we found new ways to connect through digital platforms, webinars, virtual bell ceremonies, online summits and more. With the promise of increased vaccine rollouts, the NYSE ETF Team hopes we’ll have the opportunity to gather in person in 2021. Until then, we will continue to use the many valuable NYSE media resources for sharing your insights and amplifying your ETF branding and product campaigns.

There’s much more to come in 2021, including the anticipated first-ever mutual fund to ETF conversions, which could open the door for significant cash flow into the market. We expect several key industry players to complete conversions soon as a way to tap into all of the benefits of the ETF wrapper. The NYSE also continues to advance our efforts to bring ETFs to the NYSE Trading Floor. Stay tuned for more updates as the year progresses.

For more industry updates and insights, find our Q4 2020 report below. Please reach out to the NYSE ETF team with your thoughts, and as always, we look forward to discussing how we can support and grow your business. Please stay safe and stay healthy.

Sincerely,

Douglas M. Yones, ChFC®
Head of Exchange Traded Products
New York Stock Exchange

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2020 U.S. Market Statistics

as of December 31, 2020

2,391

ETFs listed in the U.S.


$5.49T

Assets in U.S. Markets


$111.5B

Average daily value of U.S. ETF transactions


1.5B

Average daily volume of shares traded


Market Share of Exchange Volume for all U.S. ETFs

Assets Under Management of U.S. ETFs

Narrowest Quoted Spread for all U.S. ETFs

NYSE Updates

2020 In Review

Although we spent most of the year outside of 11 Wall Street, there was no shortage of excitement at the NYSE in 2020. Working closely with your teams, here’s what we accomplished:

  • Launched 164 new ETPs across 61 different issuers
  • Raised $12.3 billion in AUM
  • Welcomed 27 brand-new NYSE Arca Issuers
  • Completed 7 ETF transfers to the NYSE, totaling $1.96 billion in AUM
  • Hosted 9 webinars, opening a brand new distribution channel
  • Held 76 ETF Bell events, most of which virtual for the first time
  • Produced 95+ Issuer Insights, including What’s the Fund & NYSE Floor Talk video productions

Active ETF Update

In a defining year for active ETFs, the industry set new high watermarks across the board:

  • Assets under management (AUM): $172.8 billion, a 71% increase from year-end 2019.
  • Full year cash flow: $60 billion, shattering the 2018 record of $27.4 billion.
  • Products launched: 167- roughly half of all ETFs launched in 2020 were actively managed.
  • Active ETF Sponsors: 93, including 31 new entrants in 2020.
  • Implied active ETF revenue (average annual AUM x Expense Ratio): $600+ million, nearly double its 2019 total of $350 million.
  • Semi-transparent ETFs: 19 launches, accumulating $1 billion in AUM, an impressive debut year for these novel active ETFs that don’t disclose portfolio holdings daily.
Firms    
# of Issuers 93    
# of New Issuers 2020 31    
Products   Assets  
# of ETFs 474 AUM ($B) $172.83
# of New Launches 2020 167 3 Yr AUM CAGR 158%
Avg. ER 0.50% 5 Yr AUM CAGR 53%
Cash Flow   Trading  
YTD Cash Flow ($B) $60.0 YTD ADV (Shares) 37,297,084
3 Yr Cash Flow $113.6 YTD ADV ($) $1.6 B
5 Yr Cash Flow $135.6 YTD Avg. Spread (bps)* 39.24

Source: Factset & NYSE Internal Database and Consolidated Tape Statistics as of 12/31/2020

*Simple average

Subscribe and catch up on the NYSE Active ETF Update, our biweekly newsletter covering the latest in active ETF developments.

NYSE Insights and Events

Did you miss our latest NYSE Education Series Webinar on Business Development Companies? Visit our HomeOfETFs.com page to watch this or any of our other educational webinars.

Email us at [email protected] if you’re interested in participating in an upcoming webinar. Stay connected on the latest ETF industry events and perspectives here.

Regulatory Updates

NYSE Receives Approval to List Semi-Transparent ETFs on the NYSE Floor

In December 2020, the NYSE received regulatory approval to list active, semi-transparent ETFs on the Floor of the Exchange. Listing on the NYSE would provide active managers access to our unique floor model, which combines human oversight and accountability via Designated Market Makers with world-class technology. We're excited by this important next step to be able to list ETFs directly on the iconic NYSE Floor. We look forward to bringing you updates as we move closer to the first launch.

Industry Joins the NYSE in Seeking Additional Basket Flexibility for Active Managers

Following the NYSE’s exemptive relief filing with the SEC to allow for additional basket flexibility for active ETFs, several other semi-transparent structure sponsors also submitted similar filings. If approved, asset managers utilizing the approved semi-transparent models will be able to construct creation/redemption baskets (“custom baskets”) that differ from the actual portfolio. This would improve the operational efficiency of the structure and potentially reduce costs for sponsors. The full filings for each sponsor are available here: NYSE, Blue Tractor, Fidelity, and Precidian.

Updated Guidance on NYSE Group Actions to Comply with Executive Order 13959

Executive Order 13959 (“EO 13959”) prohibits, beginning at 9:30 a.m. eastern standard time on January 11, 2021, any transaction in publicly traded securities, or any securities that are derivative of, or are designated to provide investment exposure to, companies identified as a Communist Chinese Military Company (“CCMC”). Accordingly, as NYSE Regulation announced, it is moving forward with delisting the ADRs of China Telecom Corporation Limited (CHA), China Mobile Limited (CHL) and China Unicom (Hong Kong) Limited (CHU) (the “Issuers”). NYSE suspended trading in the Issuers at 4:00 a.m. eastern standard time on January 11, 2021.

Please also see the Department of Treasury’s Office of Foreign Asset Control publication of Communist Chinese Military Companies FAQs and related list for more information.

Issuer Insights Hub

ETF Highlights Video

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