Douglas Yones, Head of Exchange Traded Products at NYSE, told the Traders Magazine that ETFs carry more benefits for mutual funds that will opt for a swap, and the exchange has systems in place to offer guidance. The official notes that the targetted mutual funds already have significant assets under management that will perform well as ETFs. Yones says that by turning to ETFs, funds would enjoy added benefits such as reduced operating expenses while leveraging on the model for an asset manager.
Several managers have agreed to turn to ETFs
He acknowledged that several asset managers have agreed to the swap, and there is a likelihood others will follow suit. In June, Dimensional Funds converted about $30 billion mutual funds into ETFs. The asset manager unveiled its mutual funds as ETFs on the New York Stock Exchange. Notably, the conversion remains one of the largest to date. Yones pointed out that despite the exchange having structures in place for the swapping, the process is also rigorous and calls for commitment, especially from the regulatory side. He added that NYSE already posses a model set up for active asset managers intending to shift to ETFs. Furthermore, the NYSE move comes as the trend of swapping mutual funds with ETFs continues to gain momentum globally. Recently, JP. Morgan Asset Management announced the conversion of select U.S. mutual funds to ETFs in 2022. Mr. Yones said: NYSE’s latest ETF focus also follows the recent growth in the sector, with Yones noting that the exchange has captured 91% of all ETFs while launching 162 ETFs this year. Notably, most ETFs across the actors have recorded significant returns. In 2021, Direxion Daily Retail Bull 3X Shares (NYSEARCA: RETL), MicroSectors U.S. Big Banks Index ETNs (NYSEARCA: BNKU), and Breakwave Dry Bulk Shipping ETF (NYSEARCA: BDRY) rank as the top three ETFs to deliver over 100% returns, while global ETFs hit a record inflow of capital at $639 billion in H1 2021. [robinhood] [coinbase]
