Your browser is unsupported

Please visit this URL to review a list of supported browsers.

NYSE Arca Custom Basket Approval and PIMCO Q&A

NYSE Active ETF Updates

NYSE Active Proxy Structure Crosses $1 Billion + Q&A with Nuveen

October 28, 2021

NYSE becomes the first active structure to cross $1 billion in assets

On October 22, the NYSE Active Proxy Structure became the first structure that allows asset managers the flexibility of protecting their alpha generation strategies to surpass $1 billion in assets under management (AUM). Industry-wide, 40 ETFs with $3 billion in assets use the novel structures from ActiveShares, Blue Tractor, Fidelity, Invesco and T. Rowe Price. Year-to-date, these ETFs have accumulated $1.8 billion of cash flow. Looking forward, there are 15+ filed ETFs in the launch pipeline. The industry is also working to expand access to non-US equity and fixed income strategies.

Jordan Farris
Managing Director, Head of ETF Product Development,
Nuveen

Q&A With Nuveen

This week we sit down with Jordan Farris at Nuveen to discuss the company’s entry into the active ETF market and how the market is evolving.

Nuveen has a long-standing track record as an active asset manager, yet just recently launched its first actively managed equity ETFs with NYSE Arca-listed NUGO, NDVG, NWLG and NSCS. What led to the decision to enter the active ETF market earlier this year?

Nuveen is a 100+ year old organization managing more than $1 trillion in AUM on behalf of clients. Active management is part of our DNA, from municipal bond mandates to closed-end fund offerings to our extensive equity platform. Our longevity is due in part to our culture of innovation and how we have continued to evolve to meet the changing needs of our clients.

Our decision to enter the active ETF market was driven by investor preferences for accessing investment strategies. 2021 has already witnessed record flows into both passive and active ETFs, and Nuveen’s entrance into the active ETF space aligns our expertise in delivering active strategies to clients with the ongoing shift in how investors access those strategies.

For Nuveen Dividend Growth ETF (NDVG), Nuveen Winslow Large Cap Growth ESG ETF (NWLG), and Nuveen Small Cap Select ETF (NSCS), we brought existing capabilities to market, leveraging the same portfolio management teams that are responsible for the corresponding mutual fund and/or SMAs. This offers increased choice to investors with strong wrapper preferences. For Nuveen Growth Opportunities ETF (NUGO), we brought to market a capability new to Nuveen but from an experienced and successful portfolio management team.

Nuveen decided to license the NYSE Active Proxy Structure to give your investment management teams protection and disclosure flexibility inside the ETF wrapper. What were the key considerations for selecting the structure as well as the ETFs that leverage it?

We were seeking a structure that offered clients an efficient vehicle for accessing a strategy while simultaneously allowing portfolio managers to express their investment thesis without signaling trades to the market.

We have worked with the NYSE to grow our ETF business since 2016. Their understanding of market structure, exchange dynamics, and regulatory expertise gives us confidence in the NYSE Active Proxy Structure’s ability to function well as this market gains scale. Since the launch of our active ETFs in August, we have been very pleased with the secondary market and the ability of the ETF ecosystem to price the products efficiently during the trading day.

The ETFs we chose to launch using the NYSE Active Proxy Structure are several of our flagship equity strategies leveraging portfolio management teams with a proven history of delivering upon investment objectives. We have already seen allocations across all four strategies and are encouraged by investor interest.

As a global asset manager, what benefits and/or nuances come with operating an active ETF line-up compared to other investment wrappers (i.e., Mutual Funds, CITs, etc.)?

For clients, the active ETF wrapper offers an additional mechanism for accessing investment strategies. We view this added choice as beneficial to the overall client experience. Operating an active ETF product line-up, or a passive ETF line-up for that matter, requires expertise and knowledge in working with a number of market participants including exchanges, market makers, and authorized participants. For Nuveen, this expertise already resided in-house as a result of our quickly growing passive ETF line-up.

The benefits of active ETFs are largely similar to those of passive ETFs and can include greater tax efficiency and intra-day liquidity. As mentioned earlier, 2021 has already seen record growth in active ETFs as investors become more comfortable with the structure.

What are the key considerations for investors who are contemplating actively managed equity ETFs?

The key consideration is the investment strategy. Is this a strategy that aligns with the investors’ overall investment objective and has the portfolio manager been able to consistently deliver results over time? The active ETF is the delivery vehicle and has proven to be one of the more efficient ways for investors to access investment talent within a pooled investment product.

Find the investment strategy, the portfolio manager, or the index that fits your investment objective and then find the product wrapper that offers the best access. In many cases, that product wrapper will be an ETF.

What guidance would you provide sponsors as they consider expanding their offerings to include actively managed ETFs?

Speak with industry experts. There are multiple ways to enter the active ETF market and having done an industry analysis and knowing which strategies you’d like to bring to market are table stakes at this point. Developing a near complete understanding of market participants, regulations, and building a clear distribution strategy are all required for a successful launch.

Working with the NYSE can help inform and guide from a perspective that is not always clear sitting on the asset management side of the aisle. This type of support was a critical element in Nuveen bringing active ETFs to market and will continue to be impactful as we grow our existing suite and bring more products to market.

Active ETF Stat Pack

Firms
# of Issuers139
# of New Issuers 202146
ProductsAssets
# of ETFs689AUM ($B)$289.40
# of New Launches 20212273 Yr AUM CAGR166%
Avg. ER0.50%5 Yr AUM CAGR61%
Cash FlowTrading
YTD Cash Flow ($B)$76.30YTD ADV (Shares)48,798,177
3 Yr Cash Flow$168.80YTD ADV ($)$4.42 B
5 Yr Cash Flow$207.00YTD Avg. Spread (bps)*29.01

Source: Factset & NYSE Internal Database and Consolidated Tape Statistics as of 10/22/2021

*Simple average

Active, Semi-Transparent Update

TickerInceptionNameAUMYTD Cash Flow30-Day Med. Spread (bps)ADV (shares)StructureLMMExpense Ratio
EQOP9/17/20Natixis U.S. Equity Opportunities ETF$10,589,358($4,230,752)15.945692NYSE AMSCitadel0.90%
VNSE9/17/20Natixis Vaughan Nelson Select ETF$5,783,992($2,122,852)14.895772NYSE AMSCitadel0.80%
VNMC9/17/20Natixis Vaughan Nelson Mid Cap ETF$9,326,851($144,031)14.641,301NYSE AMSCitadel0.85%
ESGA7/15/20American Century Sustainable Equity ETF$154,144,440$15,811,21414.8759,189NYSE AMSCitadel0.39%
MID7/15/20American Century Mid Cap Growth Impact ETF$23,128,168$12,541,93515.1952,447NYSE AMSCitadel0.45%
ESGY7/1/21American Century Sustainable Growth ETF$6,077,456$431,6866.9751,754NYSE AMSCitadel0.39%
NDVG8/5/21Nuveen Dividend Growth ETF$5,978,666$757,3947.824,630NYSE AMSCitadel0.64%
NSCS8/5/21Nuveen Small Cap Select ETF$6,243,456$1,021,18410.5954,640NYSE AMSCitadel0.85%
NWLG8/5/21Nuveen Winslow Large-Cap Growth ESG ETF$5,927,698$775,5367.8554,244NYSE AMSCitadel0.64%
NUGO9/28/21Nuveen Growth Opportunities ETF$851,107,761$1,034,264,9107.92,170,496NYSE AMSCitadel0.55%
FDG4/2/20American Century Focused Dynamic Growth ETF$214,972,313($38,639,711)14.30526,848ActiveSharesCitadel0.45%
FLV4/2/20American Century Focused Large Cap Value ETF$246,137,144$50,086,09013.5859,855ActiveSharesCitadel0.42%
CFCV5/28/20ClearBridge Focus Value ETF$4,143,107$352,65926.645487ActiveSharesGTS0.50%
FBCG6/4/20Fidelity Blue Chip Growth ETF$470,122,450$216,248,98320.025160,530Fidelity ProxyGTS0.59%
FBCV6/4/20Fidelity Blue Chip Value ETF$99,657,060$43,574,51022.0541,888Fidelity ProxyGTS0.59%
FMIL6/4/20Fidelity New Millennium ETF$61,806,885$31,254,61820.5226,257Fidelity ProxyGTS0.59%
FGRO2/4/21Fidelity Growth Opportunities ETF$49,506,525$44,311,8534.8140,547Fidelity ProxyCitadel0.59%
FMAG2/4/21Fidelity Magellan ETF$45,829,900$38,375,56011.80530,348Fidelity ProxyRBC0.59%
FPRO2/4/21Fidelity Real Estate Investment ETF$18,855,000$14,621,7004.2312,468Fidelity ProxyCitadel0.59%
FSMO2/4/21Fidelity Small/Mid-Cap Opportunities ETF$28,477,653$23,665,36814.83518,004Fidelity ProxyRBC0.59%
FSST6/17/21Fidelity Sustainability U.S. Equity ETF$3,823,155$1,535,85510.9256,133Fidelity ProxyRBC0.59%
FDWM6/17/21Fidelity Women's Leadership ETF$2,627,138$514,38811.961,731Fidelity ProxyRBC0.59%
TCHP8/5/20T. Rowe Price Blue Chip Growth ETF$245,241,475$152,400,7539.2949,183T Rowe ProxyVirtu0.57%
TDVG8/5/20T. Rowe Price Dividend Growth ETF$106,816,547$58,879,2837.9215,944T Rowe ProxyRBC0.50%
TEQI8/5/20T. Rowe Price Equity Income ETF$52,215,141$22,520,81610.78,601T Rowe ProxyVirtu0.54%
TGRW8/5/20T. Rowe Price Growth Stock ETF$47,438,325$14,895,3828.4556,378T Rowe ProxyRBC0.52%
TSPA6/8/21T. Rowe Price U.S. Equity Research ETF$20,609,440$4,168,6839.0352,646T Rowe ProxyRBC0.52%
IVDG12/22/20Invesco Focused Discovery Growth ETF$1,111,774($284,840)15.1951,368Invesco ModelCitadel0.59%
IVSG12/22/20Invesco Select Growth ETF$1,416,514$-14.715874Invesco ModelCitadel0.48%
IVLC12/22/20Invesco US Large Cap Core ESG ETF$6,902,905$5,032,20014.083,568Fidelity ProxyCitadel0.48%
IVRA12/22/20Invesco Real Assets ESG ETF$1,949,365$433,08053.9652,210Fidelity ProxyCitadel0.59%
LOPP2/1/21Gabelli Love Our Planet & People ETF$10,615,295$6,393,13028.3152,004ActiveSharesGTS0.90%
GGRW2/16/21Gabelli Growth Innovators ETF$4,137,600$1,158,25027.065565ActiveSharesGTS0.90%
FRTY3/1/21Alger Mid Cap 40 ETF$42,070,000$31,644,37531.00518,760ActiveSharesVirtu0.60%
ATFV5/4/21Alger 35 ETF$15,715,000$13,627,62537.3257,424ActiveSharesVirtu0.55%
REIT2/26/21ALPS Active REIT ETF$23,738,760$20,708,65018.5557,958Blue TractorGTS0.68%
STNC3/16/21Stance Equity ESG Large Cap Core ETF$36,862,830$6,098,94625.2252,743Blue TractorGTS0.85%
PFUT5/26/21Putnam Sustainable Future ETF$9,084,864$1,388,11431.4953,124Fidelity ProxyVirtu0.64%
PLDR5/26/21Putnam Sustainable Leaders ETF$7,558,156$679,2009.7652,806Fidelity ProxyRBC0.59%
PGRO5/26/21Putnam Focused Large Cap Growth ETF$9,985,057$700,0988.975,913Fidelity ProxyRBC0.55%
PVAL5/26/21Putnam Focused Large Cap Value ETF$9,670,000$-28.124,265Fidelity ProxyVirtu0.55%
Total/Average$2,977,405,222$1,825,451,83916.622,721,5950.60%

Source: Factset & NYSE Internal Database and Consolidated Tape Statistics as of 10/22/2021

*Simple average

October Active ETF Launches

TickerNameIssuerLaunch DateAsset ClassAUM
MINOPIMCO Municipal Income Opportunities Active ETFPIMCO9/9/21Fixed Income$41,672,400
IOCTInnovator International Developed Power Buffer ETF - OctoberInnovator10/1/21Equity$8,900,920
EOCTInnovator Emerging Markets Power Buffer ETF - OctoberInnovator10/1/21Equity$4,462,378
SIXOAllianzIM U.S. Large Cap 6 Month Buffer10 Apr/Oct ETFAllianz10/1/21Equity$38,425,500
RISRFolioBeyond Rising Rates ETFToroso Investments10/1/21Fixed Income$1,268,250
PSCQPacer Swan SOS Conservative (October) ETFPacer Advisors10/1/21Equity$1,565,655
PSFOPacer Swan SOS Flex (October) ETFPacer Advisors10/1/21Equity$3,707,253
PSMOPacer Swan SOS Moderate (October) ETFPacer Advisors10/1/21Equity$8,901,625
QTOCInnovator Growth Accelerated Plus ETF - OctoberInnovator10/1/21Equity$2,528,490
XBOCInnovator U.S. Equity Accelerated 9 Buffer ETF - OctoberInnovator10/1/21Equity$4,326,175
XDOCInnovator U.S. Equity Accelerated ETF - OctoberInnovator10/1/21Equity$1,883,610
XTOCInnovator U.S. Equity Accelerated Plus ETF - OctoberInnovator10/1/21Equity$1,882,868
KEUAKraneShares European Carbon Allowance ETFKraneShares10/5/21Commodities$26,422,657
KCCAKraneshares California Carbon Allowance ETFKraneShares10/5/21Commodities$1,333,001
JAVAJPMorgan Active Value ETFJPMorgan Chase10/5/21Equity$27,224,978
KGROKraneShares China Innovation ETFKraneShares10/7/21Equity$2,692,700
PINKSimplify Health Care ETFSimplify Asset Management Inc.10/8/21Equity$3,243,476
MDCPVictoryShares THB Mid Cap ESG ETFVictoryShares10/5/21Equity$2,565,090
UBNDVictoryShares ESG Core Plus Bond ETFVictoryShares10/5/21Fixed Income$124,971,750
UCRDVictoryShares ESG Corporate Bond ETFVictoryShares10/5/21Fixed Income$100,399,500
GTRWisdomTree Target Range FundWisdomTree10/7/21Equity$1,290,250
MMSCFirst Trust Multi-Manager Small Cap Opportunities ETFFirst Trust10/14/21Equity$2,085,972
RUFFAlpha Dog ETFGeasphere10/15/21Equity$43,882,965
BITOProShares Bitcoin Strategy ETFProShares10/19/21Currency$1,012,246,200
BTFValkyrie Bitcoin Strategy ETFValkyrie Funds LLC10/22/21Currency$4,860,000
Total - 24 New ETFs$1,431,071,262

Source: Factset as of 10/22/2021

NYSE ETF Summit & Active ETF Issuer Insights

Missed the April NYSE ETF Summit or our Active ETF Webinar series? Access replays from the Summit here or visit HomeofETFs.com to catch up.

Hear from ETF experts representing the various active ETF structures, fund sponsors such as American Century, Fidelity, PIMCO and T. Rowe Price, liquidity providers such as Flow Traders and Jane Street, and service providers such as BNY Mellon and State Street.

Let us support your ongoing business plans

Missed a previous issue? Visit The Home of Active ETFs to catch up

Let us support your ongoing business plans

Missed a previous issue? Visit The Home of Active ETFs to catch up

Get NYSE's Active ETF Updates

Subscribe