In Focus: Passive Investing  

ETFs offer more than cheap beta

Following the rule change, many traditional asset managers who avoided the US ETF market rushed to issue ETFs.

The result is that 2021 has been the first year where active ETF new-product filings at the SEC have exceeded passive. Asset managers like JPMorgan and Dimensional have converted billions of dollars of mutual fund AUM into ETFs. 

In Europe active ETFs exist, but the market is still nascent. Pimco led the way with a range of bond ETFs and we have issued the world’s first Shariah global equity ETF, and a sustainable ESG global equity active ETF.

It is still early days for active ETFs, but watch this space. My prediction is it will be the hottest growth area in two or three years’ time.

It will mean European regulators having to follow the SEC and allow flexibility to active managers around disclosure. 

The ETF growth story will continue and has a long way to run.

Hector McNeil is co-chief executive at HANetf