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Rating:Capital Group Waits to Drink the ETF Kool-Aid Not Rated 0.0 Email Routing List Email & Route  Print Print
Wednesday, February 11, 2015

Capital Group Waits to Drink the ETF Kool-Aid

News summary by MFWire's editors

The SEC may be poised to open the ETF gates to Capital Group, but that doesn't mean that the giant behind American Funds is ready to rush through those gates just yet.

Lisa Shidler of RIABiz talked with industry insiders about the Los Angeles-based mutual fund giant's interest in the ETF space.

Last July Capital Group filed with the SEC to launch both transparent and non-transparent ETFs, yet they pulled the non-transparent application after the SEC rejected a similar request from another firm. Then last week the SEC gave notice that they planned to approve Capital Group's transparent ETFs application. Yet Capital Group isn't jumping just yet.

"We continue to have an interest in active ETFs but we have no immediate plans to launch an ETF of any kind," Capital Group spokesman Tom Joyce tells RIABiz. "We're going to continue to have conversations."

Normal ETFs disclose holdings on a daily basis, and the trade publication wonders if the danger of front-running would deter Capital Group from launching traditional, transparent ETFs. Hence the appeal of non-transparent ETFs that disclose holdings on a less frequent basis.

Morningstar's Ben Johnson (global director of ETF research), ETF Trends' Tom Lydon (editor and publisher), Tiburon Strategic Advisors' Chip Roame (managing partner), and Finetooth Consulting's Ryan Shanks all weighed in for the article. And Steve Seifert, a partner with key Capital Group distribution ally Edward Jones, even offered his two cents. 

Edited by: Neil Anderson, Managing Editor

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