Relaxed disclosure regulations could see active ETF market soar


Active exchange-traded funds (ETFs) in the US have been given approval by the Securities and Exchange Commission to trade without disclosing their holdings on a daily basis, which could see the ETF market expand rapidly worldwide, according to Antipodes Partners.
Director of listed products at Pinnacle Investment Management, Chris Meyer, said the relaxation of disclosure regulations in the US was a major step forward in the development and growth of the US active ETF market, and the move could spur many more fund managers to offer active ETFs while still allowing them to protect their intellectual property.
Active ETFs in the US would still be required to disclose daily holdings, but only to a new subset of professional trader called “authorised participant representatives”, and the public would only receive portfolio holdings on a quarterly basis, as they do in Australia.
“The decision is considered a win for active stock pickers who do not want to reveal their holdings for fear front runners and others may seek to capitalise on predicting their next move,” Meyer said.
“As the active ETF market grows in the US, increased education on what active ETFs are and the benefits they offer for investors should help stimulate interest in, and adoption of active ETFs in Australia. That bodes well for the industry’s growth.”
Recommended for you
Global asset manager BlackRock has identified bringing private markets to the wealth channel as a key business area for the firm that could generate US$500 million in revenue in the future.
Flows into cash and fixed income ETFs soared in May, rising from $366 million in April to more than $1.3 billion, data from Betashares shows.
Quinbrook Infrastructure Partners has promoted its Australian head to the role of chief executive of the global investment manager.
UK-based fund manager Royal London Asset Management has appointed a Sydney-based head of regional sales as it embarks on a multiyear plan to expand its presence internationally.