Biggest ETF Launches Of The Year

December 26, 2018

Launching an ETF is very much like planting a seed—a new fund takes time to bloom and grow. But every once in a while, we run into true magic beans that go from seed to billion-dollar trees almost overnight.

In 2018, we’ve had a handful of these magic beans hit the market.

Here are the 10 most successful launches of the year:

 

Top Asset Flows For New-To-Market ETFs

Ticker Fund Launch Date YTD Flows ($M) AUM ($M)
XLC Communication Services Select Sector SPDR Fund 06/18/2018 3,461.11 3,133.20
BBJP JPMorgan BetaBuilders Japan ETF 06/15/2018 3,251.88 3,049.87
BBCA JPMorgan BetaBuilders Canada ETF 08/07/2018 2,342.55 2,135.64
BBEU JPMorgan BetaBuilders Europe ETF 06/15/2018 1,899.64 1,754.46
FIYY Barclays ETN+ FI Enhanced Global High Yield Exchange Traded Notes Series B 03/15/2018 1,445.23 1,416.76
BBAX JPMorgan BetaBuilders Developed Asia ex-Japan ETF 08/07/2018 801.28 750.14
FFEU Barclays ETN+ FI Enhanced Europe 50 Exchange Traded Notes Series C 03/15/2018 766.65 635.29
GLDM SPDR Gold MiniShares Trust 06/25/2018 302.22 330.79
JHEM John Hancock Multifactor Emerging Markets ETF 09/27/2018 281.44 282.71
IG Principal Investment Grade Corporate Active ETF 04/18/2018 229.07 223.72

 

Each of these ETFs has an interesting story behind their quick success.

The first thing we can say about them is that none of them is exactly your run-of-the-mill new launch, coming from a small new issuer trying to carve a niche into a crowded market. These are all new funds by well-established brands—brand recognition goes a long way in helping distribute a new strategy.

More importantly, these funds each benefited from unique circumstances that translated into massive asset growth in a short amount of time. Their magic is in the details.

New GICS Sector

Starting at the top, the Communication Services Select Sector SPDR Fund (XLC) wasn’t like any other telecom ETF. It was the telecom ETF.

XLC represented an entirely new sector following changes to the Global Industry Classification Standard used by S&P Dow Jones Indices and MSCI that took effect in September. GICS changes don’t come about all that often, so XLC came to market with fanfare and plenty of attention.

XLC, which pulled from the technology and consumer discretionary sectors to create a portfolio deemed more purely telecom, gained, while the Technology Select Sector SPDR Fund (XLK) and the Consumer Discretionary Select Sector SPDR Fund (XLY) lost in the reshuffle.

Successful launch? No doubt. But not entirely magic.

‘BYOA’ Becomes A Thing

Five of the ETFs in this top-10 list relied on another recipe for overnight success. It’s one we’ve come to call “BYOA” (bring your own assets).

J.P. Morgan and John Hancock both brought to market competitively priced, core-type strategies that weren’t particularly innovative, and that competed in segments densely populated by some serious heavyweights from firms like iShares and Vanguard.

But these newcomers found immediate following in the form of in-house client assets. J.P. Morgan, in its BetaBuilder lineup of ETFs, and John Hancock, in the John Hancock Multifactor Emerging Markets ETF (JHEM), became their own biggest buyers. These firms put their own clients’ money into their proprietary funds, with asset flows so swift and impressive that these ETFs landed among the year’s most successful new launches.

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