An Inside Look At The World’s Largest Actively Managed ETF
Considering the largest ETF proper in the U.S. listed product landscape is the $212 billion passive-index based SPY, smart-beta and actively managed ETFs still have quite a bit of work to do in terms of potential upside in asset growth.
When we go down the list of all U.S. listed ETP products, the first “non-market capitalization weighted index” ETF shows up around the $12 billion level, and it is represented by USMV (iShares Edge MSCI Minimum Volatility USA, Expense Ratio 0.15%). The fund of course debuted in late 2011 as did several other “Low Volatility” targeted products that fit into the “smart-beta” category, and it has grown rather impressively over the years.
Dropping down further, around the $9 billion AUM mark we start to see some well-known “Currency Hedged” or “Hedged Equity” products, specifically the $9.1 billion HEDJ (WisdomTree Europe Hedged Equity, Expense Ratio 0.58%) the $8.5 billion DXJ (WisdomTree Japan Hedged Equity, Expense Ratio 0.48%), and the $8.2 billion DBEF (Deutsche MSCI EAFE Hedged Equity, Expense Ratio 0.35%) which are modified index products with built in currency hedges.
It is not until about the $6 billion mark until we reach the first truly “actively managed” ETF, which is MINT (PIMCO Enhanced Short Maturity Active, Expense Ratio 0.35%). MINT, which debuted back in November of 2009, was formerly run by Bill Gross until he departed PIMCO for Janus, and now Jerome Schneider is at the helm.
Fund literature suggests that MINT “Seeks greater income and total return potential than money market funds, and may be appropriate for non-immediate cash allocations. MINT will primarily invest in short duration investment grade debt securities. The average portfolio duration of MINT will vary based on PIMCO’s economic forecasts and active investment process decisions, and will not normally exceed one year.”
At around the $5 billion mark ($4.8 billion in AUM to be specific), we see a quantitative approach that incorporates company fundamentals that we have featured in this piece before, the four-star Morningstar-rated PRF (PowerShares FTSE RAFI U.S. 1000, Expense Ratio 0.39%), and the next quasi-active fund appears at the $3.6 billion mark in QUAL (iShares MSCI USA Quality Factor, Expense Ratio 0.15%).
With a litany of quasi-active and outright actively managed products available in the universe of 1,995 ETFs, there is clearly a ton of upside potential in terms of future asset growth attainable here.
The PIMCO Enhanced Short Maturity Active ETF (NYSE:MINT) was trading at $101.58 per share on Friday morning, down $0.01 (-0.01%). Year-to-date, MINT has gained 0.25%, versus a 5.06% rise in the benchmark S&P 500 index during the same period.
MINT currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #2 of 17 ETFs in the Ultra-Short Term Bonds category.
Disclaimer: The content of this article is excerpted from a daily newsletter from Street One Financial. While ETF Daily News may edit the contents and add a relevant title to the piece, the author, Paul Weisbruch, does not endorse or recommend any issuer or security mentioned herein.
Paul Weisbruch is the VP of ETF/Options Sales and Trading at Street One Financial. Prior to joining the team at Street One, Paul served as the Director of RIA and Institutional ETF Sales at RevenueShares ETFs from December 2007 until November of 2009. Before RevenueShares, Paul was employed by Susquehanna International Group from 2000 until 2007 serving in roles including OTC/NYSE Institutional Block Trading, Nasdaq/OTC Market Making, ETF/Derivatives Intelligence and Strategy, Algorithmic Trading, as well as acting as the PHLX Floor Specialist in the ETFs, SPY and DIA.Paul has been actively involved in the ETF space from both a product and trading standpoint since 2000. Additionally, Paul has well forged relationships with national RIAs, institutional pension fund managers and consultants, mutual fund and hedge fund managers, and also the ETF media. Co-authoring the “S1F ETF Daily” since 2009, the daily piece has become a must for many portfolio managers in the ETF space, with segments regularly appearing in the likes of Barron’s, WSJ, and ETFTrends.com for instance.
He holds his Series 4 (Registered Options Principal), 6, 7, 55 (Equity Trader), 63, and 65 licenses. He graduated from the University of Pittsburgh (B.S. – Economics), graduating magna cum laude, and has an MBA from Villanova University.
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