Portfolio-shielding active ETFs struggle to gain ground
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Non-transparent ETFs have struggled to gain traction among investors in the two years since the first products launched, data show.
Portfolio-shielding ETFs had $4.4bn in assets as of September 30, according to Bryan Armour, director of passive strategies research for North America at Morningstar, representing about 1.5 per cent of the active ETF market.
Non-transparent ETFs received regulatory approval in December 2019 after garnering interest from firms including BlackRock, Capital Group, Nuveen, Columbia Threadneedle and American Century.
American Century launched the first active non-transparent ETFs on March 31 2020. One, the American Century Focused Large Cap Value ETF, now has $200mn, and the other, the American Century Focused Dynamic Growth ETF, has $121mn, according to American Century’s website.
Investors piled a combined $197mn into the pair of ETFs between April and June 2020, according to data from Morningstar Direct, but that interest quickly waned. From July 2020 to September 2022, they added just $100mn in net inflows. Investors pulled $50mn from the funds during the year ended September 30.
This story originally appeared on: Financial Times - Author:Brian Ponte
