August, a typically slow month for North American markets marking the end of the summer, ended with the general equity markets working up losses over the period. The S&P500 lost about 4.7% over August as the market bounce that we saw in July fizzled out. No doubt that poor housing and employment numbers in the US had lots to do with this as investors have been forced to re-test their faith in the recovery time and again.

The Active ETF space in the US over the past month ramped up and garnered a significant amount of assets, but again the growth was driven primarily by just a few names. August also saw the number of new filings for actively-managed ETFs slow down, with fewer new players announcing plans. However, considering that there are currently 25 different issuers with plans for actively-managed ETFs which are backlogged with the SEC, one would have to say that the bottleneck definitely lies at the SEC. This was confirmed in an interview with Patrick Daugherty, who spoke of “Paralysis at the SEC”. We did see more conversion plans announced though, this time with Claymore announcing plans to convert two passively-managed bond ETFs into actively-managed ETFs. We also started to address the basics with regards to actively-managed ETFs to help new investors with our Active ETF Basics series. August also marked the closure of two Active ETFs from Grail Advisors and RiverPark, which are the first actively-managed ETFs to shut down since Bear Stearns’ very first Active ETF went down with the company in 2008.

Fund Flows:

(Click table to enlarge)

The US Active ETF space saw its assets grow by more than $400 million, but the growth was concentrated in a few names and majority of the funds in the space continued to be overlooked by investors. All in all, the total asset base reached $2.2 billion at the end of August, still below the May high. As has become the norm, PIMCO’s Enhance Short Maturity Fund (NYSE:MINT) served as a barometer for market sentiment, being directly related to investor fears. As the market fell back in August, investors looked to take risk off the table and go into cash. And in doing so, they helped MINT bolster its asset base up to $517 million, still nowhere close to the $770 million high from May, but an significant rise from the $333 million the fund had at the end of July.

However, the biggest magnet for assets in the Active ETF space, was WisdomTree’s just launched actively-managed ETF – the WisdomTree Emerging Markets Local Debt Fund (NYSE:ELD). In the span of 3 weeks, the fund was able to attract close to $200 million in assets, remarkable considering how most other funds performed over the period. Clearly, WisdomTree has been able to gain quite a lot of interest and traction from investors for to its emerging markets fixed-income strategy. Whether that’s a result of superior marketing capabilities or a simple case of finding the right investor need and catering to it, is anyone’s guess. But most other Active ETF issuers could take a lesson or two from WisdomTree as another fund, the Dreyfus Brazilian Real Fund (NYSE:BZF) was also able to increase its asset base $62 million to $220 million. WisdomTree’s largest fund remains the Chinese Yuan Fund (NYSE:CYB), which stood at $585 million and in fact lost some money in August.

(Click table to enlarge)

In Canada, the Active ETF scene remained largely stagnant, with the exception of AlphaPro’s latest new launch – the Horizons AlphaPro Corporate Bond Fund (NYSE:HAB) – which built on its successful launch by gathering $10 million more in assets. That brought the total assets within actively-managed ETFs in Canada to $340 million.

Head to our Active ETFs Database for a more dynamic listing of all Active ETFs.

New Entrants, Filings and Closures:

1. Huntington files for strategy using options – direct link

2. Claymore files to convert 2 passive ETFs into Active ETFs – direct link

3. U.S. One expands its exemptive relief and plans new Active ETF – direct link

4. Grail Advisors shuts down two of its funds – direct link

5. Van Eck removes derivatives from Active ETF plans – direct link
 

Written By Shishir Nigam from ActiveETFs | InFocus

Shishir Nigam is the founder of ActiveETFs | InFocus (http://www.etfshub.com/), which provides extensive coverage and analysis of actively-managed ETFs in US and Canada, including debates on major industry trends, insights on the latest product launches from issuers in the Active ETF space as well as in-depth interviews with industry executives and thought leaders.

Disclosure: No positions in above-mentioned names.
 
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MINT, NYSE:BZF, NYSE:CYB, NYSE:ELD