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BNY Mellon’s first active ETF invests in international stocks

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The group revealed Thursday that BNY Mellon Investment Management’s first active exchange-traded fund will be an international equity product. Executives said the asset manager believes he can take advantage of powerful demand and product gaps in global equities with one of its dedicated managers.

The company plans to launch a focused international ETF, which will be fully transparent and will invest in 25 to 30 companies in developed markets outside the United States.

Walter Scott, a subsidiary of BNY Mellon, will offer the sub-portfolio.

The fund’s fees and expenses were not disclosed, and company executives did not comment on pricing. However, they note that the company’s low costs of compliant products will complement its active ambitions.

This article was previously published by Ignites, a title owned by the FT Group.

“The two work in tandem to aid manage the overall cost of the portfolio,” said Matthew Camuso, ETF strategist at BNY Mellon Investment Management. Low-cost, no-fee ETFs “liberate the fee budget for areas like international equities, and they can use that and stay within our organization.”

The BNY Mellon debuted an ETF final year with a series of ultra-low-cost ETFs, including the no-fee core stock and Core Bond ETF. The eight funds combined had $845 million in assets under management at the end of June, according to Morningstar Direct data.

Together, ETFs attracted $282 million during the first half of 2021, according to the Morningstar database. Thus, the $82.7 billion lengthy-term begin-end mutual fund line lost $422 million over the alike period.

There is powerful demand for international stocks, but there have been few active strategies to load that need for ETF investors, executives at the New York-based manager said.

“There’s still a lot of white space,” Camuso said.

Although stores have prepared plans for unused active ETFs, there are only 53 active ETFs available in the US market, 13 of which have launched this year, Camuso said. Meanwhile, there are more than 180 active ETFs in the United States.

Investors raised nearly $97 billion in international ETFs during the first half of 2021, according to Morningstar Direct data. Only US ETFs attracted more, with a value of $169 billion.

Investors looking to purchase actively managed ETFs are more interested in buying global stocks or fixed-income ETFs, according to the Brown Brothers Harriman Global Investor ETF 2021 Survey.

But unlike US stocks, asset managers can only launch international equity products that disclose their holdings in their portfolios every day.

Opaque strategies are only allowed to invest in US stocks or securities that are traded on begin exchanges at the alike time as US stocks, according to the terms of the Securities and Exchange Commission. This means that international exposure is limited to companies that issue American Depository Receipts that trade on US stock exchanges or international ETFs.

None of the BNY Mellon ETFs protect their holdings.

* Ignites is a news service published by the FT Specialist for professionals in the asset management industry. It covers everything from unused product launches to regulations and industry trends. Trials and subscriptions are available at ignites.com.

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Referensi: www.ft.com

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