Semi-Transparent ETFs:
Nascent Product Opportunity for Managers

As the semi-transparent ETF industry enters its second year, new entrants will need to decide whether to launch new strategies, replicate existing ones, or convert mutual funds into ETFs. The following report provides an overview of the semi-transparent ETF industry including the various models that have emerged plus distributors' perspectives on this emerging product.

Key findings:

In the asset management industry, widespread availability of active exchange-traded funds (ETFs) has been prognosticated for the better part of the last 20 years. However, various forces, including a desire among active equity managers to shield their portfolio holdings and an incentive for the industry to protect the trillions of dollars in mutual fund assets, kept active equity ETFs in the concept stage of development. Meanwhile, the ETF marketplace continued to expand its reach beyond asset-weighted equity index portfolios to include smart beta ETFs that alter indexes to pursue a wide variety of investment objectives, as well as transparent fixed-income ETFs.

In recent years, though, advancements in Fintech have led to the creation of several models that allow for non-transparency or semi-transparency of equity holdings in ETFs. This has coincided with the ongoing displacement of active equity mutual fund assets by passive equity ETFs, finally pushing active equity ETFs from concept to reality.

Access the full report created in partnership with FUSE Research Network.

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Analysis includes:

  • Semi-Transparent ETF AUM
  • Semi-Transparent ETF models currently approved and in queue
  • Insight on the distributor's perspective
  • Key takeaways for managers considering a semi-transparent ETF
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