Cetera, the broker-dealer and registered investment advisor giant, has unveiled an investment resource to help its affiliated advisors get an edge in a booming corner of the ETF space.
The firm announced that it has launched an Active Exchange Traded Funds Research Select List, curated by Cetera Investment Management.
This new resource, designed exclusively for Cetera-affiliated advisors, offers a detailed selection of 50 active ETFs spanning 26 different asset classes including equity, fixed income, and alternatives. The initiative aims to equip Cetera’s financial professionals with well-researched and carefully vetted investment recommendations, catering to a market segment that has seen rapid expansion.
"We are proud to become one of only a handful of firms offering an active ETF recommended list to help educate our advisors about this growing investment structure," Gene Goldman, CIO at CIM, said in a statement.
As of April 2024, active ETFs have grown to represent a 40 percent slice of the US ETF pie, which includes 3,605 ETFs and more than $8.9 trillion as per Morningstar’s database.
The past several years have seen a torrent of active ETF launches, unleashed after the SEC opened the floodgates for those strategies with regulatory changes in 2019. In particular, the ETF Rule (Rule 6c-11) eliminated certain barriers, facilitating faster and less costly ETF launches.
From about 350 active ETFs in 2019, the market has quadrupled to nearly 1,400 by 2023, illustrating a significant shift towards this more tax-efficient investment structure.
As Morningstar noted in a new report, the absence of sales loads and distribution fees makes active ETFs 36 percent cheaper than their mutual fund counterparts on average, resulting in $1.6 trillion in net outflows from active mutual funds in 2022 and 2023.
"We are confident that this is a key differentiator that will deliver multiple benefits to Cetera and our affiliated financial professionals, including business optimization and organic growth,” Goldman said.
The active ETF list from Cetera builds on its previous moves to educate and inform advisors, including the bitcoin ETF policy it came out with in March.
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