The first 15 semitransparent ETFs raised more than $600 million in assets under management in 2020.
The increased demand for semitransparent exchange-traded funds (ETFs) in 2020 has underlined the appetite for this new type of investment. First available in 2020, the adoption of these funds was slow to start representing only 3.5% of ETFs. With time, semitransparent ETFs have gained traction and are now being looked at for the advantages they possess over traditional mutual funds and ETFs, more specifically the level of transparency required.
Michael Esselman, Interim Chief Investment Officer of Retirement + Wealth at OneDigital, was recently featured in the U.S. News & World Report article “How Advisors Are Using Active Semitransparent ETFs in Client Portfolios,” to explain how we should be thinking about these new semitransparent ETFs.
Semitransparent ETFs are essentially not any different from any other ETF from an investor or advisor's point of view. Investors should focus on the same things for any other ETF they are looking at: Does it complement my other holdings? How does it increase the return profile or decrease my portfolio's risk profile? Do I understand the strategy and trust the management team and so on? These ETFs are the answer for active managers, and they can now launch an ETF and protect themselves from "competitor attacks.
— Michael Esselman, Interim Chief Investment Officer, OneDigital Retirement + Wealth
Read the full article here.
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