The Next Big Financial Firms That May Issue ETFs

August 10, 2016

Over the last year or so, we’ve seen more large financial institutions enter the ETF industry as issuers, names like Goldman Sachs, John Hancock; Principal Financial Group; Oppenheimer, Legg Mason, USAA and Franklin Templeton.

Other large financial institutions have filed for exemptive relief requests with the SEC to begin offering their own ETFs. While only a few have specific funds in registration, the intent to enter the market is certainly genuine. Short of proposing funds that deviate far from the norm, it’s rare for firms to be denied exemptive relief.

So here are four large financial firms lining up to be the next to dive into the ETF pool.

Wells Fargo
It doesn’t get much bigger than Wells Fargo, the largest bank by market cap ($248 billion) and the third-largest U.S. bank by assets ($1.85 trillion). Wells is familiar with ETFs by way of providing indexes for funds like the SPDR Wells Fargo Preferred Stock ETF (PSK), the Etracs Monthly Pay 2xLeveraged Wells Fargo MLP Ex-Energy ETN (LMLP) and the Etracs Linked to the Wells Fargo Business Development Company Index ETN (BDCS).

Wells had filed for an active short-term bond fund under a different exemptive relief request a while back and has yet to move further ahead. But certainly as an index and mutual fund provider, Wells is in a good position to begin offering both passive and active funds.

Like Wells, Nuveen is no stranger to the ETF space, but rather than provide indexes, the firm is an ETF subadvisor in an area where it specializes: municipal bonds. The company, which has nearly $300 billion in assets under management, subadvises on multibillion SPDR funds such as the SPDR Nuveen Barclays Municipal Bond ETF (TFI) and the SPDR Nuveen Barclays Short Term Municipal Bond ETF (SHM).

While the SPDR funds are index-based, Nuveen has filed for active transparent equity and fixed-income funds. And again, like Wells, with its experience in the ETF space, it would seem a matter of time before the financial giant makes a splash.


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