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Q&A with ACA Foreside

September 28, 2023
Joseph Higgins headshot
Joseph Higgins

Distribution Commercial Lead, ACA Foreside

This week we sit down with Joseph Higgins at ACA Foreside to discuss the company’s views and support of the active ETF market.

ACA Foreside is a leading provider in legal underwriting services for ETFs, servicing over 150 issuers across more than 850 ETFs. For those that aren’t familiar, what role does ACA Foreside play in the ETF ecosystem?

There are two different ways we work with our global client base. There is what we provide in our formal role as legal underwriter, working with our clients on a day-to-day basis, and how we partner with clients from a consultative standpoint.

ACA Foreside provides a critical vendor solution that needs to be in place to launch and operate an ETF. Every ETF requires our role as the Broker-Dealer to serve as a Legal Underwriter. As a result, most ETF issuers outsource this function to us based on our scale and presence in the marketplace.

As part of the legal underwriter role, we partner with our client’s marketing and compliance teams to review and approve all ETF marketing material. In addition to this, we facilitate, negotiate, and maintain all Authorized Participant (AP) agreements and work with capital markets teams to review and affirm all AP orders in the relevant AP Portal.

We also provide Registered Rep Licensing, Series 7, 63, and 24, among others, for our client’s sales staff. Since an ETF is considered a security, if our client’s sales team would like to market their ETF more broadly, we would hold their FINRA licenses within our in-house Broker-Dealer and provide the necessary compliance oversight. Currently, ACA holds over 2,000 rep licenses across 200+ managers globally.

Foreside merged with ACA Global last year to better serve issuers and prospects with governance, risk and compliance solutions. How can the combined entity better serve asset managers and how does it position the firm for the continued growth of the ETF industry?

The Foreside brand has successfully established itself as the gold standard for our role in the ETF Industry. ACA Group has a long-standing reputation as the compliance gold standard for the largest asset managers in the world. Today, we are a combined entity with over 6,000 clients, and asset managers continue to rely on us and benefit from these end-to-end outsourced solutions.

ACA’s new CEO, Patrick Olson, formerly the COO and Chief Product Officer at BlackRock, has energized our ETF solutions and intricately understands our client base. He continuously echoes ACA’s commitment to our role in the ETF industry and the key role we play for clients.

By servicing such a large client base, ACA Foreside has a unique vantage point across the ETF ecosystem. What are the key trends and/or questions you are hearing from clients and prospects today?

As the largest third-party legal underwriter in the U.S., ACA Foreside has a front row seat to all trends occurring in the ETF space. Outside of the more obvious trends we are all seeing, one trend to highlight is the growth of turn-key or white-label ETF platforms. These platforms historically were leveraged for smaller entrants in the ETF space. Today, we are seeing some of the larger asset managers, who historically would have created their own ETF trust, now filing under turn-key ETF trusts. Another emerging trend is the interest from alternative managers with potential SMA to ETF conversions. These are two trends driving current conversations we are having with our clients.

ACA Foreside has long supported active managers in the ETF industry. That said, how has the industry’s rapid growth impacted your business and service offerings?

ACA Foreside is uniquely positioned at the center of the ETF ecosystem as an agnostic partner, allowing us to serve as a valuable resource or consultant for our clients as they evaluate the ETF landscape. As a result, we help our clients navigate the ETF ecosystem by outlining the industry's structure and making appropriate introductions.

The rapid growth of active ETFs has propelled us to evolve and refine our services, focusing on regulatory compliance, operational efficiency, tailored solutions, and providing valuable guidance to our clients. We remain committed to responding and adapting to industry shifts and meeting the demands of an ever-expanding and dynamic ETF market.

Lastly, what guidance would you provide sponsors as they consider expanding their product lineup to include actively managed ETFs?

Consider your distribution plan and how your ETFs will be sold. Many of our clients are launching to solve a need for their underlying clients or prospects. Start there. ETFs are said to be sold and not bought, so at the very least, hire an ETF specialist and capital markets person.

Lastly, rely on your service partners. Our clients are typically elated by all the valuable advice we and our partner firms provide but quickly understand that we are doing this in the spirit of the ETF itself. We are all students and advocates of the product and have made various bets on its growth.

Active ETF Stat Pack

# of Issuers239
# of New Issuers 202338
# of ETFs1144AUM ($B)$431.95
# of New Launches 20232293 Yr AUM CAGR46%
Avg. ER0.43%5 Yr AUM CAGR47%
Cash FlowTrading
YTD Cash Flow ($B)$26.52YTD ADV (Shares)124,577,079
3 Yr Cash Flow$254.52YTD ADV ($)$4.18 B
5 Yr Cash Flow$315.34YTD Avg. Spread (bps)*29.44

Source: Factset & NYSE Internal Database and Consolidated Tape Statistics as of 7/21/2023

*Simple average

Active, Semi-Transparent ETFs

TickerInceptionNameAUMYTD Flows30 Day Median Spread (bps)ADV (shares)StructureLMMExpense RatioListing Venue
VNSE9/17/20Natixis Vaughan Nelson Select ETF$27,742,491$13,937,94013.826,887NYSE AMSCitadel0.80%NYSE
VNMC9/17/20Natixis Vaughan Nelson Mid Cap ETF$3,165,565-$4,182,98214.30905NYSE AMSCitadel0.85%NYSE
ESGA7/15/20American Century Sustainable Equity ETF$152,834,600$31,937,85311.876,910NYSE AMSCitadel0.39%NYSE
MID7/15/20American Century Mid Cap Growth Impact ETF$42,965,665$13,270,85914.003,199NYSE AMSCitadel0.45%NYSE
ESGY7/1/21American Century Sustainable Growth ETF$10,459,592$2,705,5118.541,732NYSE AMSCitadel0.39%NYSE
NDVG8/5/21Nuveen Dividend Growth ETF$8,510,370$508,2118.45351NYSE AMSCitadel0.64%NYSE
NSCS8/5/21Nuveen Small Cap Select ETF$5,702,632$010.3668NYSE AMSCitadel0.85%NYSE
NWLG8/5/21Nuveen Winslow Large-Cap Growth ESG ETF$5,484,250$188,8618.93126NYSE AMSCitadel0.64%NYSE
NUGO9/28/21Nuveen Growth Opportunities ETF$2,481,541,907-$173,762,6138.20137,528NYSE AMSCitadel0.55%NYSE
SAEF11/16/21Schwab Ariel ESG ETF$16,053,250$3,057,65038.962,567NYSE AMSFlow Traders0.59%NYSE
IWLG6/23/22IQ Winslow Large Cap Growth ETF$20,068,750$3,717,51021.66776NYSE AMSCitadel0.60%NYSE
IWFG6/23/22IQ Winslow Focused Large Cap Growth ETF$6,510,210$021.9299NYSE AMSCitadel0.65%NYSE
TSME10/5/22Thrivent Small-Mid Cap ESG ETF$133,670,992$60,065,3829.3314,261NYSE AMSRBC0.65%NYSE
JPSV3/8/23JPMorgan Active Small Cap Value ETF$10,656,800$957,3508.68498NYSE AMSCitadel0.74%NYSE
LSGR6/29/23Natixis Loomis Sayles Focused Growth ETF$5,190,150$5,249,97510.463,573NYSE AMSCitadel0.59%NYSE
SGLC3/31/23SGI U.S. Large Cap Core ETF$94,675,000$92,575,17528.3834,627NYSE AMSGTS0.85%NYSE
FDG4/2/20American Century Focused Dynamic Growth ETF$174,505,043$26,558,05210.6011,486ActiveSharesCitadel0.45%Cboe BZX
FLV4/2/20American Century Focused Large Cap Value ETF$217,128,734-$1,297,8689.548,384ActiveSharesCitadel0.42%Cboe BZX
FBCG6/4/20Fidelity Blue Chip Growth ETF$759,233,851$233,681,97916.95143,551Fidelity ProxyGTS0.59%Cboe BZX
FBCV6/4/20Fidelity Blue Chip Value ETF$120,279,131-$15,849,87623.4218,258Fidelity ProxyGTS0.59%Cboe BZX
FMIL6/4/20Fidelity New Millennium ETF$108,249,229$16,106,83716.0815,520Fidelity ProxyGTS0.59%Cboe BZX
FGRO2/4/21Fidelity Growth Opportunities ETF$180,307,379$94,894,74513.3564,657Fidelity ProxyCitadel0.59%Cboe BZX
FMAG2/4/21Fidelity Magellan ETF$46,327,424-$1,047,36511.528,920Fidelity ProxyRBC0.59%Cboe BZX
FPRO2/4/21Fidelity Real Estate Investment ETF$13,322,152-$2,562,60413.872,950Fidelity ProxyCitadel0.59%Cboe BZX
FSMO2/4/21Fidelity Small/Mid-Cap Opportunities ETF$33,512,320$4,960,6476.886,868Fidelity ProxyRBC0.60%Cboe BZX
FSST6/17/21Fidelity Sustainability U.S. Equity ETF$9,632,525$1,469,95610.951,308Fidelity ProxyRBC0.59%NYSE
FDWM6/17/21Fidelity Women's Leadership ETF$3,175,368$346,52212.291,099Fidelity ProxyRBC0.59%NYSE
TCHP8/5/20T. Rowe Price Blue Chip Growth ETF$375,550,663$32,363,53310.1387,704T Rowe ProxyVirtu0.57%NYSE
TDVG8/5/20T. Rowe Price Dividend Growth ETF$305,741,241$25,695,6667.9358,467T Rowe ProxyRBC0.50%NYSE
TEQI8/5/20T. Rowe Price Equity Income ETF$126,218,003$29,588,7638.4912,589T Rowe ProxyVirtu0.54%NYSE
TGRW8/5/20T. Rowe Price Growth Stock ETF$50,894,832$4,692,0297.366,039T Rowe ProxyRBC0.52%NYSE
TSPA6/8/21T. Rowe Price U.S. Equity Research ETF$30,911,971$4,029,9219.953,666T Rowe ProxyRBC0.34%NYSE
IVRA12/22/20Invesco Real Assets ESG ETF$2,913,193$042.431,047Fidelity ProxyCitadel0.59%Cboe BZX
Gabelli Love Our Planet & People ETF
GGRW2/16/21Gabelli Growth Innovators ETF$2,584,820$053.60137ActiveSharesGTS0.90%NYSE
GAST1/5/22Gabelli Asset ETF$4,792,620$034.5244ActiveSharesGTS0.00%NYSE
GABF5/11/22Gabelli Financial Services Opportunities ETF$8,077,300$1,881,96536.80741ActiveSharesGTS0.04%NYSE
Gabelli Commercial Aerospace & Defense ETF
FRTY3/1/21Alger Mid Cap 40 ETF$26,378,000-$3,085,50057.138,898ActiveSharesVirtu0.60%NYSE
ATFV5/4/21Alger 35 ETF$12,521,250$2,888,00059.671,821ActiveSharesVirtu0.55%NYSE
AWEG3/7/23Alger Weatherbie Enduring Growth ETF$3,912,000$2,826,62566.601,455ActiveSharesVirtu0.65%NYSE
CLIA5/9/23Veridien Climate Action ETF$13,201,785$13,418,39040.519,022ActiveSharesGTS0.85%NYSE
REIT2/26/21ALPS Active REIT ETF$17,467,547$844,85035.012,983Blue TractorGTS0.68%NYSE
STNC3/16/21Hennessy Stance ESG Large Cap ETF$42,380,464-$250,69618.122,544Blue TractorGTS0.85%NYSE
DYTA3/30/23SGI Dynamic Tactical ETF$108,509,800$110,352,37528.7147,374Blue TractorGTS0.95%NASDAQ
PFUT5/26/21Putnam Sustainable Future ETF$170,057,854$159,349,89029.3815,277Fidelity ProxyVirtu0.64%NYSE
PLDR5/26/21Putnam Sustainable Leaders ETF$362,842,958$337,036,1119.75105,594Fidelity ProxyRBC0.59%NASDAQ
PGRO5/26/21Putnam Focused Large Cap Growth ETF$37,005,819$22,721,7608.877,984Fidelity ProxyRBC0.55%NYSE
PVAL5/26/21Putnam Focused Large Cap Value ETF$214,304,385$67,593,68527.6336,030Fidelity ProxyVirtu0.55%NYSE
HFGO11/9/21Hartford Large Cap Growth ETF$87,685,675-$1,091,39830.592,592Fidelity ProxyCitadel0.59%NYSE
SEMI3/30/22Columbia Seligman Semiconductor and Technology ETF$25,491,644$9,130,80032.794,620Fidelity ProxyVirtu0.75%NYSE
CAPE4/5/22DoubleLine Shiller CAPE U.S. Equities ETF$285,762,100$45,408,80011.0437,421ActiveSharesCitadel0.65%Cboe BZX
FMCX4/25/22FMC Excelsior Focus Equity ETF$76,828,800$35,00017.60284ActiveSharesGTS0.70%NYSE
BYRE5/19/22Principal Real Estate Active Opportunities ETF$5,142,789$436,84026.35352Fidelity ProxyVirtu0.65%NYSE

Source: Factset & NYSE Internal Database and Consolidated Tape Statistics as of 9/22/2023

*Simple average

Recent Active ETF Launches

TickerNameIssuerLaunch DateAsset ClassAUM
ROEAstoria US Quality Kings ETFAstoria8/1/23Equity$58,299,156
AUGTAllianzIM U.S. Large Cap Buffer10 Aug ETFAllianz Investment Management8/1/23Equity$51,433,025
AUGWAllianzIM U.S. Large Cap Buffer20 Aug ETFAllianz Investment Management8/1/23Equity$148,598,250
VETZAcademy Veteran Impact ETFAcademy Asset Management8/2/23Fixed Income$19,495,125
FIIGFirst Trust Intermediate Duration Investment Grade Corporate ETFFirst Trust8/3/23Fixed Income$10,023,190
MGOVFirst Trust Intermediate Government Opportunities ETFFirst Trust8/3/23Fixed Income$14,985,040
HFDGA Absolute Return ETFDays Global Advisors8/3/23Alternatives$15,187,827
TGLRLAFFER TENGLER Equity Income ETFLaffer Tengler8/8/23Equity$5,814,768
NFLYYieldMax NFLX Option Income Strategy ETFYieldMax8/8/23Equity$5,985,750
ZSCUSCF Sustainable Commodity Strategy FundUSCF8/9/23Commodities$2,918,000
SDVDFT Cboe Vest SMID Rising Dividend Achievers Target Income ETFFT Cboe Vest8/10/23Equity$1,995,170
TDVIFT Cboe Vest Technology Dividend Target Income ETFFT Cboe Vest8/10/23Equity$2,045,731
STXTStrive Total Return Bond ETFStrive8/10/23Fixed Income$40,350,750
BUXXStrive Enhanced Income Short Maturity ETFStrive8/10/23Fixed Income$28,147,000
DIVLMadison Dividend Value ETFMadison8/15/23Equity$63,254,890
CONYYieldMax COIN Option Income Strategy ETFYieldMax8/15/23Equity$7,443,638
CANCTema Oncology ETFTema8/15/23Equity$2,278,746
ROYATema Global Royalties ETFTema8/17/23Equity$1,810,200
BRAZGlobal X Brazil Active ETFGlobal X8/18/23Equity$2,607,617
NDIAGlobal X India Active ETFGlobal X8/18/23Equity$2,560,994
SAUGFT Cboe Vest U.S. Small Cap Moderate Buffer ETF - AugustFT Cboe Vest8/21/23Equity$14,277,031
FT Cboe Vest U.S. Equity Enhance & Moderate Buffer ETF - August
FT Cboe Vest8/21/23Equity$50,601,810
NVDGraniteShares 1.5x Short NVDA Daily ETFGraniteShares8/22/23Equity$943,224
AMDSGraniteShares 1x Short AMD Daily ETFGraniteShares8/22/23Equity$738,325
TSLRGraniteShares 1.75x Long TSLA Daily ETFGraniteShares8/22/23Equity$1,100,028
TSDDGraniteShares 1.5x Short TSLA Daily ETFGraniteShares8/22/23Equity$899,622
CAMLCongress Large Cap Growth ETFCongress Asset Management8/22/23Equity$1,303,960
CSMDCongress SMid Growth ETFCongress Asset Management8/22/23Equity$1,304,410
CVRDMadison Covered Call ETFMadison8/22/23Equity$64,208,438
LGROLevel Four Large Cap Growth Active ETFALPS8/23/23Equity$58,632,792
MSFOYieldMax MSFT Option Income Strategy ETFYieldMax8/25/23Equity$5,651,663
DISOYieldMax DIS Option Income Strategy ETFYieldMax8/25/23Equity$2,479,375
KEMKraneShares Dynamic Emerging Markets Strategy ETFKraneShares8/25/23Equity$3,843,329
MAGGMadison Aggregate Bond ETFMadison8/29/23Fixed Income$12,178,646
PCGGPolen Capital Global Growth ETFLitman Gregory8/30/23Equity$756,000
Segall Bryant & Hamill Select Equity ETF
Segall Bryant & Hamill8/30/23Equity$504,116
AHLTAmerican Beacon AHL Trend ETFAmerican Beacon8/31/23Asset Allocation$25,488,500
XOMOYieldMax XOM Option Income Strategy ETFYieldMax8/31/23Equity$3,042,000
ISEPInnovator International Developed Power Buffer ETF - SeptemberInnovator9/1/23Equity$31,441,500
SEPTAllianzIM U.S. Large Cap Buffer10 Sep ETFAllianz Investment Management9/1/23Equity$11,533,903
SEPWAllianzIM U.S. Large Cap Buffer20 Sep ETFAllianz Investment Management9/1/23Equity$23,919,285
MSTIMadison Short Term Strategic Income ETFMadison9/6/23Fixed Income$34,448,250
Return Stacked U.S. Stocks & Managed Futures ETF
Return Stacked9/6/23Alternatives$5,844,000
XFIXF/m Opportunistic Income ETFF/m9/6/23Fixed Income$23,954,400
KSEAKraneShares Rockefeller Ocean Engagement ETFKraneShares9/12/23Equity$2,464,328
JPMOYieldMax JPM Option Income Strategy ETFYieldMax9/12/23Equity$4,531,815
NVDDDirexion Daily NVDA Bear 1X SharesDirexion Shares9/13/23Equity$11,436,097
NVDUDirexion Daily NVDA Bull 1.5X SharesDirexion Shares9/13/23Equity$9,469,022
DCORDimensional US Core Equity 1 ETFDimensional Fund Advisors9/13/23Equity$6,048,200
QQQYDefiance Nasdaq 100 Enhanced Options Income ETFDefiance ETFs9/14/23Equity$12,662,000
SMRIBushido Capital US Equity ETFBushido9/14/23Equity$234,554,100
JIVEJPMorgan International Value ETFJPMAM9/14/23Equity$12,119,625
JGLOJPMorgan Global Select Equity ETFJPMAM9/14/23Equity$9,348,420
MAPPHarbor Multi-Asset Explorer ETFHarbor9/14/23Asset Allocation$3,440,658
Bahl & Gaynor Income Growth ETF
Bahl & Gaynor9/15/23Equity$101,554,462
GSEPFT Cboe Vest U.S. Equity Moderate Buffer ETF - SeptemberFT Cboe Vest9/18/23Equity$32,659,059
FT Cboe Vest U.S. Equity Buffer & Premium Income ETF - September
FT Cboe Vest9/18/23Equity$6,000,020
LGLZSubversive Cannabis ETFSubversive9/19/23Equity$2,761,413
FDIVMarketDesk Focused U.S. Dividend ETFMarketDesk9/20/23Equity$41,537,630
HCOWAmplify Cash Flow High Income ETFAmplify9/20/23Equity$2,198,520
WABFWestern Asset Bond ETFFranklin Templeton9/21/23Fixed Income$42,355,500
EMSFMatthews Emerging Markets Sustainable Future Active ETFMatthews Asia9/22/23Equity$1,266,220
INDEMatthews India Active ETFMatthews Asia9/22/23Equity$999,576
ASIAMatthews Pacific Tiger Active ETFMatthews Asia9/22/23Equity$1,273,435
ADVEMatthews Asia Dividend Active ETFMatthews Asia9/22/23Equity$1,512,985
JPANMatthews Japan Active ETFMatthews Asia9/22/23Equity$999,532
LRGCAB US Large Cap Strategic Equities ETFAllianceBernstein9/20/23Equity$5,117,457
Defiance S&P 500 Enhanced Options Income ETF
Defiance ETFs9/19/23Equity$2,939,850
AMDYYieldMax AMD Option Income Strategy ETFYieldMax9/19/23Equity$3,791,460
Total - 69 New ETFs

Source: Factset as of 9/22/2023

Before investing in any mutual fund or exchange-traded fund, you should consider its investment objectives, risks, charges, and expenses.

Contact Fidelity for a prospectus, an offering circular, or, if available, a summary prospectus containing this information. Read it carefully.

*This ETF is different from traditional ETFs. Traditional ETFs tell the public what assets they hold each day. This ETF will not. This may create additional risks for your investment. For example: You may have to pay more money to trade the ETF’s shares. This ETF will provide less information to traders, who tend to charge more for trades when they have less information. The price you pay to buy ETF shares on an exchange may not match the value of the ETF’s portfolio. The same is true when you sell shares. These price differences may be greater for this ETF compared to other ETFs because it provides less information to traders. These additional risks may be even greater in bad or uncertain market conditions. The ETF will publish on its website each day a “Tracking Basket” designed to help trading in shares of the ETF. While the Tracking Basket includes some of the ETF’s holdings, it is not the ETF’s actual portfolio. The differences between this ETF and other ETFs may also have advantages. By keeping certain information about the ETF secret, this ETF may face less risk that other traders can predict or copy its investment strategy. This may improve the ETF’s performance. If other traders are able to copy or predict the ETF’s investment strategy, however, this may hurt the ETF’s performance. For additional information regarding the unique attributes and risks of the ETF, see section below. Additional Active ETF Disclosure: The objective of the actively managed ETF Tracking Basket is to construct a portfolio of stocks and representative index ETFs that tracks the daily performance of an actively managed ETF without exposing current holdings, trading activities, or internal equity research. The Tracking Basket is designed to conceal any nonpublic information about the underlying portfolio and only uses the Fund’s latest publicly disclosed holdings, representative ETFs, and the publicly known daily performance in its construction. You can gain access to the Tracking Basket and the Tracking Basket Weight overlap on or Although the Tracking Basket is intended to provide investors with enough information to allow for an effective arbitrage mechanism that will keep the market price of the Fund at or close to the underlying NAV per share of the Fund, there is a risk (which may increase during periods of market disruption or volatility) that market prices will vary significantly from the underlying NAV of the Fund; ETFs trading on the basis of a published Tracking Basket may trade at a wider bid/ask spread than ETFs that publish their portfolios on a daily basis, especially during periods of market disruption or volatility, and, therefore, may cost investors more to trade, and although the Fund seeks to benefit from keeping its portfolio information secret, market participants may attempt to use the Tracking Basket to identify a Fund’s trading strategy, which, if successful, could result in such market participants engaging in certain predatory trading practices that may have the potential to harm the Fund and its shareholders. Because shares are traded in the secondary market, a broker may charge a commission to execute a transaction in shares, and an investor may incur the cost of the spread between the price at which a dealer will buy shares and the price at which a dealer will sell shares. For more information on each fund, please visit the individual product pages. The NYSE and Fidelity Investments are independent entities and are not legally affiliated. Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917 1097457.1.0

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