NY Life backs away from semi-transparent ETFs
New York Life Investments appears to be pulling the plug on the semi-transparent ETF structure, switching its two products that do not disclose holdings daily to a fully transparent model.
In regulatory filings Thursday, the asset manager disclosed that a pair of its IndexIQ ETFs will make that change at the end of August and be rebranded. Those products are the IQ Winslow Large Cap Growth ETF and IQ Winslow Focused Large Cap Growth ETF, which will be renamed as the NYLI Winslow Large Cap Growth and Focused Large Cap Growth ETFs.
The company is not a major player in the semi-transparent or non-transparent ETF market, and those products are small, at $33 million and $11 million in assets, respectively. But the shift to a fully transparent structure, in which the actively managed ETFs will publish their holdings daily, is among the latest signs that demand for the semi-transparent structure might not be living up to the hype.
“It’s just another piece of evidence that the non-transparent structure hasn’t taken off like a lot of people expected it to,” said Ryan Jackson, manager research analyst for passive strategies at Morningstar. Jackson said he was among those seeing more of a future for them.
“We’ve all been scratching our heads a little bit,” he said, about the “lack of takeoff for non-transparent ETFs.”
New York Life did not immediately comment on the changes.
Non-transparent and semi-transparent ETFs have been seen as a way for active managers to provide strategies in ETF form without having to give away their portfolio holdings, which puts them at much less risk for copying by competitors or others. However, active managers have also debuted products with traditional fully transparent structures, which might be
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