Page 17 - Investment Advisor September 2021

ETF ADVISOR

By Ginger Szala

JPMorgan to Convert $10B in Mutual Funds

to ETFs in 2022

The move follows Dimensional Fund Advisors’ June conversion of $29 billion.

.P. Morgan Asset Management converted $29 billion in mutual funds you had the ‘ETF Rule’ that sort of
announced in August plans to to ETFs. Bloomberg said at the time that democratized the ability of asset man-
Jconvert four of its mutual funds — this move would start a major trend over agers to take advantage of some of the
with $10 billion in assets under manage- the next 10 years. exemptions that were previously only
ment combined — to exchange-traded Two notable advantages ETFs have granted to a few firms. That really came
funds sometime early next year, subject over mutual funds is they are typically down to doing things like custom bas-
to the each fund’s board approval. The cheaper and more tax-efficient, said kets and being able to take full advan-
company stated that the ETF vehicle is a Daniel Sotiroff, analyst of passive strate- tage of the tax efficiencies that are in the
structure that is “well-suited to the four gies of Morningstar Research Services, ETF wrapper.”
mutual funds currently in scope and will who covers DFA. He said another factor is the rise
be beneficial to the investors.” “A couple of things enabled more of nontransparent structures in active
The conversion continues a trend on active management to get into the ETF management that don’t have to disclose
moving mutual funds into ETF vehicles. space over the past couple of years,” holdings every day like most ETFs,
In June, Dimensional Fund Advisors Sotiroff told Investment Advisor. “[First] which also attracted active managers.

SEPTEMBER 2021 INVESTMENT ADVISOR 15