Daily ETF Watch: Mutual Fund Plans ETNs

April 22, 2014

Barclays Bank is looking to roll out a MLP ETN with a familiar mutual fund company.

Barclays Bank PLC and OFI Global Asset Management, which consists of Oppenheimer Funds, are looking to launch a suite of ETNs under the Barclays OFI SteelPath MLP ETNs moniker on April 24. The ETNs will launch on the NYSE Arca Stock Exchange, according to a press release.

The ETNs will be linked to the volume-weighted average price of the Barclays OFI SteelPath Midstream MLP Index, which tracks the performance of a basket of direct interests in master limited partnerships.

The new partnership expands OFI SteelPath’s footprint beyond mutual funds and separately managed accounts offered through the OFI Global Asset Management franchise.

Mutual fund stalwarts, including TCW and MFS Investment Management, are currently finding new ways (short of creating and launching their own funds) to bring exchange-traded products—usually active strategies—to market, by teaming up with existing issuers, at a time when ETFs are taking off.

To be sure, a plethora of mutual fund firms and insurance companies have begun laying the regulatory groundwork to offer their own ETFs in the past few years; most recently, the insurer Prudential. But precious few—with the exception of Pimco, Fidelity and most recently, Franklin Templeton—have actually launched ETFs.

In all the maneuvering, what is clear is that since the first ETF came to market 21 years ago, the world of ETFs continues to slowly and steadily expand, with some $2 trillion in assets under management now in sight. That’s far less than the $13 trillion in open-end mutual funds or the $6 trillion in hedge funds, but the writing’s on the wall, and no one wants to be left out.

ETF Sale

WisdomTree Investments is expanding its footprint south of the border.

La Comision Nacional del Sistema de Ahorro para el Retiro, the Mexican pension funds investment regulator, has approved six WisdomTree ETFs for sale to Mexican Pension Funds, including the:

This isn’t WisdomTree’s first foray into Mexico, which previously approved seven WisdomTree ETFs for sale to the country’s pension funds, including:

U.S.-listed ETFs have become increasingly popular investment choices for Latin American investors. As of the end of 2011, Latin American mutual and pension funds allocated some $80 billion to nondomestic mutual funds, ETFs, stocks and bonds.

This is forecasted to grow to $235 billion in pension fund allocations and $61 billion in mutual fund assets by the end of 2016.

 

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