Q&A with Exchange Traded Concepts
December 9, 2021
Garrett Stevens
CEO,
Exchange Traded Concepts
Q&A WITH EXCHANGE TRADED CONCEPTS
This week we sit down with Garrett Stevens at Exchange Traded Concepts to discuss the company’s active ETF platform and how the active ETF market is evolving.
Exchange Traded Concepts (ETC) is an ETF platform provider that provides asset managers a turnkey solution as they look to enter the ETF market. For those who are unfamiliar, what services do you provide as an ETF platform provider?
When we talk about being a “turnkey” ETF platform, we really mean it. We handle everything that is required to launch and operate an ETF. We have everything from in-house legal counsel and compliance to an in-house marketing team of website and graphic designers, who create custom websites and marketing materials for our clients, and a digital marketing solution to help clients raise awareness and, hopefully, assets for their funds. ETC also has an experienced team of portfolio managers on our trading desk in NYC to facilitate day-to-day trading operations. Our team of 22 people has deep experience in the ETF industry going back to the very first ETF ever launched in 1993. ETC is the global pioneer in white label ETFs and is the largest white label firm in the world. We currently have 44 funds on our platform including active, passive, fixed income, fund of funds and commodity funds with over $9 billion in AUM.
Recently, ETC has supported several actively managed asset managers launching new ETF businesses. What, if any, additional considerations should a firm have as it works through market entry?
ETC currently has 23 actively managed funds that we have launched for our clients. The number of new active entrants continues to expand all the time. The ETF wrapper has many benefits for active asset managers and their clients. The ability of actively managed ETFs to utilize custom, in-kind baskets for creations and redemptions when making changes to the fund’s portfolio makes significant tax efficiency possible. Operational efficiencies are another big benefit to managers that are considering the ETF wrapper for the strategy. Being able to manage one ETF portfolio rather than hundreds of individual accounts streamlines the administrative process as well.
Before there were mutual fund to ETF conversions, there were SMA to ETF conversions. ETC has assisted on a number of these conversions. What is unique about this process?
ETC has assisted a number of registered investment advisers with the process of converting their SMAs into white labeled ETFs. The ETF provides significant operational efficiencies for RIAs and can offer meaningful tax advantages for clients whose SMAs are converted into ETFs. It is important to work with experienced partners that can help navigate the complicated legal and operational issues associated with these conversions.
Active ETFs are headed for another record-breaking year. Based on your role and client conversations, what needs to happen for the industry to continue to grow?
We believe the active ETF industry will continue to grow in terms of new products, new entrants and assets. As more and more managers outside the ETF industry learn about the ability to create their own funds by either moving an existing strategy into an ETF wrapper or bringing a different strategy to market, interest in the space will continue to grow as investors gain access to new and different products. This growth in the industry will continue to serve investors by keeping fees competitive, investor choice high and adding more options for investors to build portfolios that meet their needs.
Lastly, what guidance would you provide sponsors as they consider expanding their product offerings to include actively managed ETFs?
When considering an ETF launch, the way you choose to launch it may make all the difference in the success of the new fund. The time spent designing its strategy, the fund’s operations and how the fund will be positioned in the marketplace will be time well spent prior to the actual launch. The partners you choose to work with can bring tremendous value to the whole process and to the end result. The NYSE has been instrumental to our clients and their funds in areas ranging from marketing, to capital markets issues, to regulatory insight.
Active ETF Stat Pack
| Firms | |||
|---|---|---|---|
| # of Issuers | 148 | ||
| # of New Issuers 2021 | 55 | ||
| Products | Assets | ||
| # of ETFs | 717 | AUM ($B) | $288.70 |
| # of New Launches 2021 | 260 | 3 Yr AUM CAGR | 162% |
| Avg. ER | 0.50% | 5 Yr AUM CAGR | 61% |
| Cash Flow | Trading | ||
| YTD Cash Flow ($B) | $85.60 | YTD ADV (Shares) | 72,521,681 |
| 3 Yr Cash Flow | $172.90 | YTD ADV ($) | $3.84 B |
| 5 Yr Cash Flow | $215.40 | YTD Avg. Spread (bps)* | 29.00 |
Source: Factset & NYSE Internal Database and Consolidated Tape Statistics as of 12/3/2021
*Simple average
Active, Semi-Transparent Update
| Ticker | Inception | Name | AUM | YTD Cash Flow | 30-Day Med. Spread (bps) | Spread (bps) ADV (shares) | Structure | LMM | Expense Ratio |
|---|---|---|---|---|---|---|---|---|---|
EQOP | 09/17/2020 | Natixis U.S. Equity Opportunities ETF | $10,211,921 | $(4,230,752) | 16.38 | 1,324 | NYSE AMS | Citadel | 0.90% |
VNSE | 09/17/2020 | Natixis Vaughan Nelson Select ETF | $6,014,679 | $(2,124,066) | 15.87 | 1,246 | NYSE AMS | Citadel | 0.80% |
VNMC | 09/17/2020 | Natixis Vaughan Nelson Mid Cap ETF | $9,010,152 | $(144,031) | 16.66 | 2,040 | NYSE AMS | Citadel | 0.85% |
ESGA | 07/15/2020 | American Century Sustainable Equity ETF | $155,533,107 | $15,790,781 | 14.46 | 8,919 | NYSE AMS | Citadel | 0.39% |
MID | 07/15/2020 | American Century Mid Cap Growth Impact ETF | $24,361,806 | $14,974,506 | 14.86 | 2,521 | NYSE AMS | Citadel | 0.45% |
ESGY | 07/01/2021 | American Century Sustainable Growth ETF | $6,769,590 | $899,077 | 8.72 | 1,525 | NYSE AMS | Citadel | 0.39% |
NDVG | 08/05/2021 | Nuveen Dividend Growth ETF | $6,250,248 | $1,022,818 | 7.73 | 3,190 | NYSE AMS | Citadel | 0.64% |
NSCS | 08/05/2021 | Nuveen Small Cap Select ETF | $6,298,125 | $1,298,008 | 11.06 | 3,535 | NYSE AMS | Citadel | 0.85% |
NWLG | 08/05/2021 | Nuveen Winslow Large-Cap Growth ESG ETF | $6,309,000 | $1,039,594 | 7.72 | 2,991 | NYSE AMS | Citadel | 0.64% |
NUGO | 09/28/2021 | Nuveen Growth Opportunities ETF | $3,228,610,228 | $3,245,154,410 | 7.75 | 2,679,898 | NYSE AMS | Citadel | 0.55% |
SAEF | 11/16/2021 | Schwab Ariel ESG ETF | $5,194,200 | $5,458,176 | 22.76 | 27,320 | NYSE AMS | Flow Traders | 0.59% |
FDG | 04/02/2020 | American Century Focused Dynamic Growth ETF | $208,655,388 | $(32,476,957) | 14.65 | 25,306 | ActiveShares | Citadel | 0.45% |
FLV | 04/02/2020 | American Century Focused Large Cap Value ETF | $219,707,480 | $31,886,973 | 13.2 | 10,882 | ActiveShares | Citadel | 0.42% |
CFCV | 05/28/2020 | ClearBridge Focus Value ETF | $4,060,309 | $352,143 | 26.35 | 443 | ActiveShares | GTS | 0.50% |
FBCG | 06/04/2020 | Fidelity Blue Chip Growth ETF | $516,320,603 | $263,440,880 | 17.48 | 158,147 | Fidelity Proxy | GTS | 0.59% |
FBCV | 06/04/2020 | Fidelity Blue Chip Value ETF | $99,390,200 | $46,491,568 | 19.36 | 39,905 | Fidelity Proxy | GTS | 0.59% |
FMIL | 06/04/2020 | Fidelity New Millennium ETF | $60,169,200 | $32,757,233 | 21.17 | 24,724 | Fidelity Proxy | GTS | 0.59% |
FGRO | 02/04/2020 | Fidelity Growth Opportunities ETF | $51,284,000 | $49,737,013 | 4.7 | 40,146 | Fidelity Proxy | Citadel | 0.59% |
FMAG | 02/04/2021 | Fidelity Magellan ETF | $51,318,485 | $42,787,593 | 12.13 | 30,706 | Fidelity Proxy | RBC | 0.59% |
FPRO | 02/04/2021 | Fidelity Real Estate Investment ETF | $20,307,840 | $15,881,860 | 7.01 | 11,797 | Fidelity Proxy | Citadel | 0.59% |
FSMO | 02/04/2021 | Fidelity Small/Mid-Cap Opportunities ETF | $29,954,213 | $26,082,473 | 15.06 | 17,019 | Fidelity Proxy | RBC | 0.59% |
FSST | 06/17/2021 | Fidelity Sustainability U.S. Equity ETF | $5,434,975 | $3,213,838 | 10.93 | 5,774 | Fidelity Proxy | RBC | 0.59% |
FDWM | 06/17/2021 | Fidelity Women's Leadership ETF | $2,560,738 | $514,388 | 12.07 | 1,663 | Fidelity Proxy | RBC | 0.59% |
TCHP | 08/05/2020 | T. Rowe Price Blue Chip Growth ETF | $248,711,137 | $164,586,422 | 9.82 | 51,000 | T Rowe Proxy | Virtu | 0.57% |
TDVG | 08/05/2020 | T. Rowe Price Dividend Growth ETF | $113,241,655 | $65,325,182 | 8.07 | 15,824 | T Rowe Proxy | RBC | 0.50% |
TEQI | 08/05/2020 | T. Rowe Price Equity Income ETF | $52,758,369 | $24,517,654 | 11.02 | 8,609 | T Rowe Proxy | Virtu | 0.54% |
TGRW | 08/05/2020 | T. Rowe Price Growth Stock ETF | $48,072,590 | $17,297,763 | 9.09 | 6,270 | T Rowe Proxy | RBC | 0.52% |
TSPA | 06/08/2021 | T. Rowe Price U.S. Equity Research ETF | $21,485,319 | $5,004,349 | 9.26 | 2,615 | T Rowe Proxy | RBC | 0.52% |
IVDG | 12/22/2020 | Invesco Focused Discovery Growth ETF | $687,014 | $(711,220) | 14.26 | 1,362 | Invesco Model | Citadel | 0.59% |
IVSG | 12/22/2020 | Invesco Select Growth ETF | $1,386,214 | $- | 14 | 878 | Invesco Model | Citadel | 0.48% |
IVLC | 12/22/2020 | Invesco US Large Cap Core ESG ETF | $6,919,825 | $5,032,200 | 11.94 | 3,289 | Fidelity Proxy | Citadel | 0.48% |
IVRA | 12/22/2020 | Invesco Real Assets ESG ETF | $2,338,415 | $877,110 | 36.5 | 2,205 | Fidelity Proxy | Citadel | 0.59% |
LOPP | 02/01/2021 | Gabelli Love Our Planet & People ETF | $10,929,750 | $6,682,480 | 40.44 | 1,781 | ActiveShares | GTS | 0.90% |
GGRW | 02/16/2021 | Gabelli Growth Innovators ETF | $4,097,890 | $1,302,865 | 30.13 | 508 | ActiveShares | GTS | 0.90% |
FRTY | 03/01/2021 | Alger Mid Cap 40 ETF | $42,532,500 | $36,202,500 | 37.89 | 20,937 | ActiveShares | Virtu | 0.60% |
ATFV | 05/04/2021 | Alger 35 ETF | $14,259,000 | $13,627,625 | 38.47 | 6,742 | ActiveShares | Virtu | 0.55% |
REIT | 02/26/2021 | ALPS Active REIT ETF | $24,509,860 | $21,466,000 | 11.47 | 7,339 | Blue Tractor | GTS | 0.68% |
STNC | 03/16/2021 | Stance Equity ESG Large Cap Core ETF | $37,591,080 | $6,379,829 | 27.67 | 2,374 | Blue Tractor | GTS | 0.85% |
PFUT | 05/26/2021 | Putnam Sustainable Future ETF | $9,030,277 | $2,025,922 | 31.72 | 2,795 | Fidelity Proxy | Virtu | 0.64% |
PLDR | 05/26/2021 | Putnam Sustainable Leaders ETF | $7,522,488 | $679,200 | 10.04 | 2,263 | Fidelity Proxy | RBC | 0.59% |
PGRO | 05/26/2021 | Putnam Focused Large Cap Growth ETF | $10,039,921 | $700,098 | 9.61 | 4,798 | Fidelity Proxy | RBC | 0.55% |
PVAL | 05/26/2021 | Putnam Focused Large Cap Value ETF | $14,196,288 | $6,001,744 | 29.25 | 5,162 | Fidelity Proxy | Virtu | 0.55% |
Total/Average | $5,404,036,076 | $4,136,805,243 | 16.87 | 3,247,773 | 0.60% |
Source: Factset & NYSE Internal Database and Consolidated Tape Statistics as of 12/3/2021
*Simple average
November Active ETF Launches
| Ticker | Name | Issuer | Launch Date | Asset Class | AUM | |
|---|---|---|---|---|---|---|
JPIE | JPMorgan Income ETF | JPMorgan Chase | 11/02/2021 | Fixed Income | $105,903,600 | |
HEQT | Simplify Hedged Equity ETF | Simplify Asset Management Inc. | 11/02/2021 | Equity | $13,139,725 | |
GLDX | USCF Gold Strategy Plus Income Fund ETF | USCF | 11/03/2021 | Commodities | $3,079,375 | |
MFUL | Collaborative Investment - Mindful Conservative ETF | Retireful LLC | 11/03/2021 | Asset Allocation | $1,226,030 | |
MOHR | Collaborative Investment Series Trust - Mohr Growth ETF | Retireful LLC | 11/03/2021 | Equity | $2,444,250 | |
RULE | Collaborative Investment Series Trust - Adaptive Core ETF | Retireful LLC | 11/03/2021 | Asset Allocation | $1,244,775 | |
SARK | Tuttle Capital Short Innovation ETF | Tuttle Tactical Management, LLC | 11/08/2021 | Equity | $44,124,480 | |
HFGO | Hartford Large Cap Growth ETF | The Hartford | 11/10/2021 | Equity | $22,973,393 | |
RHRX | RH Tactical Rotation ETF | Adaptive | 11/08/2021 | Equity | $33,685,535 | |
RHTX | RH Tactical Outlook ETF | Adaptive | 11/08/2021 | Asset Allocation | $20,071,027 | |
AQGX | AI Quality Growth ETF | Adaptive | 11/08/2021 | Equity | $69,821,321 | |
GREI | Goldman Sachs Future Real Estate and Infrastructure Equity ETF | Goldman Sachs | 11/11/2021 | Equity | $9,810,000 | |
GDOC | Goldman Sachs Future Health Care Equity ETF | Goldman Sachs | 11/11/2021 | Equity | $11,758,500 | |
GBUY | Goldman Sachs Future Consumer Equity ETF | Goldman Sachs | 11/11/2021 | Equity | $8,221,500 | |
AHHX | Adaptive High Income ETF | Adaptive | 11/15/2021 | Asset Allocation | $58,623,875 | |
AMAX | RH Hedged Multi-Asset Income ETF | Adaptive | 11/15/2021 | Asset Allocation | $36,032,248 | |
OALC | OneAscent Large Cap Core ETF | Oneascent Holdings LLC | 11/16/2021 | Equity | $55,959,000 | |
DFCF | Dimensional Core Fixed Income ETF | Dimensional Fund Advisors LP | 11/16/2021 | Fixed Income | $82,755,915 | |
DFSD | Dimensional Short-Duration Fixed Income ETF | Dimensional Fund Advisors LP | 11/16/2021 | Fixed Income | $351,919,080 | |
DFIP | Dimensional Inflation-Protected Securities ETF | Dimensional Fund Advisors LP | 11/16/2021 | Fixed Income | $33,357,150 | |
DFNM | Dimensional National Municipal Bond ETF | Dimensional Fund Advisors LP | 11/16/2021 | Fixed Income | $20,109,920 | |
PSDN | AdvisorShares Poseidon Dynamic Cannabis ETF | AdvisorShares | 11/17/2021 | Equity | $2,751,272 | |
FSIG | First Trust Limited Duration Investment Grade Corporate ETF | First Trust | 11/18/2021 | Fixed Income | $9,973,040 | |
AHYB | American Century Select High Yield ETF | American Century Investments | 11/18/2021 | Fixed Income | $19,797,840 | |
UVDV | UVA Dividend Value ETF | Mcivy Co. LLC | 11/19/2021 | Equity | $2,860,386 | |
IBET | iBET Sports Betting and Gaming ETF | Inherent Funds | 11/16/2021 | Equity | $253,974 | |
XBTF | VanEck Bitcoin Strategy ETF | VanEck | 11/16/2021 | Currency | $16,984,980 | |
GHTA | Goose Hollow Tactical Allocation ETF | Goose Hollow | 11/17/2021 | Asset Allocation | $612,595 | |
MSMR | McElhenny Sheffield Managed Risk ETF | Aptus Capital Advisors | 11/17/2021 | Asset Allocation | $15,838,420 | |
TYNE | Direxion Nanotechnology ETF | Direxion | 11/23/2021 | Equity | $2,425,524 | |
Total - 30 New ETFs | $1,057,758,731 |
Source: Factset as of 12/3/2021
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.