Rabu, 04 Februari 2015

American Funds to get approval to offer ETFs

Massive mutual fund operation could come storming into a popular investment product

Feb 4, 2015 @ 10:43 am

By Trevor Hunnicutt

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Regulators intend to OK an application by the company behind the American Funds brand of mutual funds popular with brokers to offer ETFs for the first time, according to a notice posted on the Securities and Exchange Commission website.

Reversing previous statements that it was not interested in building exchange-traded funds, the Capital Group Cos. Inc. submitted an application last year that would allow it to build and offer the popular funds, which are the fastest-growing asset management product.

The company's entry into the space would mark a huge endorsement of the ETF structure by traditional active managers. American Funds is the third-largest mutual fund company in the U.S., managing $1.2 trillion in mutual funds (sold primarily by almost every major broker-dealer in the country) along with other investment products.

But it has largely missed the growth — to $2 trillion in the U.S. — of the exchange-traded fund industry, which is primarily composed of index-tracking funds.

Though the SEC has indicated it intends to approve the application, opponents of the proposal can still submit a request for a hearing before the commission, though such a hearing is unlikely.

Capital Group officials were not available for comment.

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