U.S. Markets close in 2 hrs 17 mins

Mutli-Asset ETFs Eye U.K. Market


Multi-asset exchange traded funds have proven popular with investors in the U.S. due in part to a combination of robust yields and exposure to several income-generating asset classes under one umbrella.

ETF sponsors are now looking to test the appetite for multi-asset funds in the U.K. market. Nick Brooks, head of research and investment strategy at ETF Securities, told Nick Reeve of the Financial Times that multi-asset ETFs could debut in the U.K. as soon as March.

The FT reports that just one multi-asset ETF, the db x-trackers SCM Multi-Asset Ucits ETF, currently trades in London. That product is actively managed, but ETF Securities is reportedly eying a passively managed multi-asset ETF.

It appears other providers think the idea of U.K.-listed multi-asset ETFs is sound, but that does not mean they will rush to bring new product to market.

Most multi-asset ETFs that trade in the U.S. feature exposure to some combination of common stocks, master limited partnerships (MLPs), closed end funds, real estate investment trusts (REITS), preferred stocks, high-yield bonds and other asset classes. [Multi-Asset ETFs Get Some Interest Rate Relief]

Popular members of the group include the $1.1 billion Guggenheim Multi-Asset Income Index ETF (CVY) and the First Trust NASDAQ Multi-Asset Diversified Income Index Fund (MDIV) . MDIV has attracted $536.1 million in assets since its August 2012 debut.

Other multi-asset ETFs currently available to U.S. investors include the iShares Morningstar Multi-Asset Income ETF (IYLD) and the Guggenheim International Multi-Asset Income Index ETF (HGI).

Guggenheim Multi-Asset Income Index ETF

ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of CVY.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.