Capital Groups Framsted said that before the Securities and Exchange Commissions 2019 regulatory changes a lot of advantages of ETFs were constrained to index or passive funds, with the new regime since opening an opportunity for active strategies.
As so-called fully transparent ETFs, all the holdings of each Capital Group fund will be revealed each day. Other mutual fund giants like Fidelity and T. Rowe Price Group Inc. have entered the ETF market using active non-transparent funds, only to see those struggle to gain traction.
Unlike some of its peers active equity ETFs, Capital Groups offerings will be fully transparent and have the flexibility to invest outside of the U.S., which should help the ETFs differentiate from benchmark based funds, said Todd Rosenbluth, an ETF analyst at CFRA who anticipates Capital Group will become a top-tier ETF provider in the next few years.
Framsted said at the moment, Capital Group is not planning on converting any of its mutual funds into ETFs.
The post Last great ETF holdout caves as Capital Group launches funds appeared first on InvestmentNews.
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