This article was originally published on ETFTrends.com.
Investors in ETFs have come to know and love the wrapper very quickly over the last few decades, with the wrapper accelerating even further since the 2019 ETF rule. As mutual fund managers start to increasingly adopt the vehicle either as a complement or a conversion for their mutual funds, advisors will need to be educated about liquidity, trading ETFs, and their own zero-fee ETFs, all priorities for the ETF experts over at BNY Mellon.
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Ben Slavin, Global Head of ETFs at BNY Mellon[/caption]
Speaking at the ETF Exchange conference in Miami last week, ETF managers from BNY Mellon's asset servicing and asset management arms flagged the importance of continuing ETF education not only in their interactions with advisors but also across the entire ETF industry.
"I think really that transition around how to navigate those liquidity conversations is a very significant challenge that the industry still needs to tackle, although a lot of the people here take it for granted," said BNY Mellon's global head of ETFs on the asset management side, Ben Slavin.
"It's not just 'buy it,' it's also, 'here's the best way to access it based on whatever your trading strategy may be.' And obviously, that depends on the product and issuer. Again, it's 2023 for this industry, but it's a long way to go," he added.
Thirty to thirty-four percent of BNY Mellon's time creating new content or training salespeople involves addressing advisor questions on what kind of trade orders to use for ETFs, when to trade them, and how their liquidity works.
"That's why we developed a piece titled 'ETF Trading Case Studies,'" said Matt Camuso, ETF strategist at BNY Mellon. "It's true trades, it's no more hypotheticals, these are real trades on the exchange in our ETFs."
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Matt Camuso, ETF strategist at BNY Mellon[/caption]
Speaking to advisors about its strategies, the firm is putting forward its BNY Mellon Concentrated International ETF (BKCI), an actively managed fundamental research strategy. BKCI speaks to advisor concerns that BNY Mellon is hearing about rising rates and inflation, Camuso said, and can be a strong complement to an advisor's passive slice in a strategy like the iShares MSCI EAFE ETF (EFA).
"To funnel through all of those in different regions that are having different rate environments or different inflation experiences, you really want someone with a boots-on-the-ground approach with experience in those markets, who understands what value looks like," Camuso said, adding that BKCI is highly concentrated.