Daily ETF Watch: USAA OK'd For Active ETFs

February 21, 2014

The behemoth provider of funds and insurance to combat veterans and their families is a step closer to launching active ETFs.

San Antonio, Texas-based USAA, the financial services company set up for U.S. Armed Forces and State Department personnel and their families, has received the green light from regulators to market a broad array of proposed actively managed ETFs. USAA is the latest firm to take steps to join the rapidly growing ETF industry.

The firm will begin its foray into the ETF space with 14 initial proposed funds, many with a focus on fixed income. The lineup also includes funds focused on dividend-rich stocks and natural resources.

USAA, which offers a broad array of proprietary products including mutual funds, insurance and annuities, is getting in what is turning out to be a rather long line of existing funds firms that want to begin offering ETFs.

How or when many of these well-known mutual fund companies actually begin launching ETFs isn’t clear. But there’s no doubt that more and more firms are looking for ways to get into the fast growing ETF market, now boasting some $1.7 trillion in assets.

Filings

  • J.P. Morgan has received the thumbs-up from regulators to launch active, self-indexed, master-feeder, long/short and 130/30 funds. Master-feeder structures have become trendy in the ETF space because of their flexibility in allowing ETFs, serving as the feeder fund, to hold assets of a mutual fund. Self-indexed ETFs, meanwhile, allow issuers to bring to market innovative ETFs quickly, and often more cheaply, without the use of third-party index providers.
  • State Street Global Advisors has put into registration three smart beta ETFs that will screen for value, low volatility, and quality stocks in developed and emerging markets. The newly proposed ETFs include the:
  1. SPDR MSCI EAFE Quality Mix ETF
  2. SPDR MSCI Emerging Markets Quality Mix ETF
  3. SPDR MSCI World Quality Mix ETF

All three funds will track MCSI Quality Mix indexes that have exposure to large- and mid-cap names in their respective markets.

 

 

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