Guinness Atkinson Files To Offer ETFs

March 26, 2013

Can the ETF market accommodate a niche player like Guinness Atkinson, who plans to join the fray?

Guinness Atkinson, the money manager known for its active mutual funds focused on alternative energy and Asia, filed regulatory paperwork with the Securities and Exchange Commission to gain permission to market index-based exchange-traded funds.

The so-called exemptive relief filing was light on details, but seemed to cast a wide net that implied the company could end up sponsoring equities as well as fixed-income funds focused on the United States and on international markets including Australia, Canada, China, France, Germany, Hong Kong, Italy,  the Netherlands and the U.K.

Guinness Atkinson, the sponsor of eight no-load open-ended mutual funds—including the Guinness Atkinson Alternative Energy Fund (GAAEX) and the Guinness Atkinson Renminbi Yuan & Bond Fund (GARBX)—is the latest mutual fund company to lay the regulatory groundwork necessary to join the rapidly expanding world of ETFs.

Total U.S.-listed ETF assets now stand just shy of an all-time record at $1.454 trillion after the first fund was launched 20 years ago. That asset total remains far below the $13 trillion-plus for mutual funds, but many see a long-term upward trajectory clearly in place.

Still, it’s hardly clear that newcomers such as Guinness Atkinson will get traction once they start offering funds. After all, more than 80 percent of the total assets in ETFs are controlled by the three biggest companies—BlackRock’s iShares; State Street Global Advisors; and Vanguard—and the number of fund closures for lack of assets markedly began accelerating last year.

“Exemptive relief” grants fund companies exemptions to aspects of the Investment Company Act of 1940. It often takes a year or more for a fund company to actually launch a new product after it first files for exemptive relief.



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