Mutual fund pioneer MFS Funding Administration launches first ETFs

By Suzanne McGee

(Reuters) – MFS Funding Administration, the Boston-based asset supervisor that unveiled the world’s first open-ended mutual fund a century in the past, is making a foray into exchange-traded funds with the launch of 5 ETFs on Thursday.

Three of the ETFs are tied to the inventory market, whereas the opposite two provide core bond and municipal bond publicity, respectively, the agency mentioned in a press launch.

“This isn’t about launching a brand new enterprise, however about delivering our present capabilities to traders in a brand new automobile or bundle, the ETF,” Michael Roberge, CEO of MFS, advised Reuters.

Buyers have piled practically $1 trillion into ETFs this 12 months, with a booming U.S. inventory market and a proliferation of recent merchandise fueling the file influx.

The recognition of ETFs has spurred conventional asset administration corporations corresponding to Constancy and Invesco to launch their very own choices lately to compete with trade giants like State Avenue (NYSE:STT) International Advisors, Vanguard and BlackRock (NYSE:BLK).

Whereas MFS was a really early mover within the mutual fund enterprise, launching the Massachusetts Buyers Belief fund in 1924, it has been comparatively sluggish to enter the more and more aggressive ETF area, analysts mentioned.

“There are nonetheless some latecomers to this product which have been slower and extra cautious,” mentioned Bryan Armour, ETF analyst at Morningstar. “As lively ETFs have exploded in dimension, the impetus for them to dedicate assets to ETFs has grown.”

ETFs are extra liquid than mutual funds, since they are often traded on an change all through the day, and extra tax environment friendly. In addition they are inclined to have decrease administration charges.

The 5 ETFs are MFS Lively Worth, MFS Lively Development, MFS Lively Worldwide, MFS Lively Core Plus Bond and MFS Lively Intermediate Muni Bond. They mirror present MFS methods, Roberge mentioned.

Armour pointed to Tuesday’s debut of the primary ETF from Harris Associates L.P., the Oakmark U.S. Massive Cap ETF, managed by Invoice Nygren, as one other latest instance of a prime mutual fund identify transferring into ETFs.