SEI Study: Active Exchange Traded Funds Will Help Fuel Sector's Next Growth Phase

SEI Study: Active Exchange Traded Funds Will Help Fuel Sector's Next Growth 
Phase 
Experts Predict Market Will Reach $500 Billion by 2020 
OAKS, PA -- (Marketwired) -- 04/22/13 --   While actively managed
exchange traded funds (ETFs) currently make up less than 1 percent of
the global ETF market, a new paper released by SEI (NASDAQ: SEIC)
predicts the vehicles will be a major contributor to the next phase
of ETF expansion, ultimately competing with traditional active mutual
funds for market share. The paper, "Getting a Grasp on Actively
Managed ETFs Before the Boom," contends that the benefits of ETF
products -- low cost, transparency, and the potential liquidity, and
tax efficiency -- make them attractive vehicles for bringing more
active management strategies to financial advisors and individual
investors via an easy-to-trade, single-ticker investment vehicle. 
The paper reveals that increased interest from pension funds,
endowments, and other large institutional investors will likely help
fuel growth in the active ETF space. An SEC statement in late 2012
now allows active ETFs to utilize derivatives, enabling fund sponsors
to expand to other asset classes, such as commodities and currencies.
This move, as well as the increased regulatory scrutiny of
money-market mutual funds and discussion about a floating-rate NAV,
has made active ETFs more attractive to managers, prompting
traditional mutual fund-only providers to move in on the space.
Confirming growth projections from many industry pundits, global
management consultant McKinsey & Co. predicts assets in actively
managed ETFs will reach $500 billion by 2020, up from $12.6 billion
today.  
"Investors are looking for actively managed strategies at a lower
cost and the benefits of ETFs make them an ideal product structure
for delivering such value," said Jay Cipriano, head of Traditional
Solutions for SEI's Investment Manager Services division. "Recently
there has been positive movement supporting growth in active ETFs,
but the historical roadblocks and lengthy SEC approval process have
steered both managers and investors away. If managers can take
advantage of these new positive catalysts, active ETFs may not only
fuel the next phase of ETF growth, but over time may challenge
traditional active mutual funds for market share."  
"With giants like PIMCO already in the space and others such as
Franklin, T. Rowe Price, and Columbia Management working through the
filing process, it's clear that active ETFs are not a passing fad,"
said Tom Lydon, Editor, ETF Trends. "The market is in its infancy and
there's a long way to go before they are truly a rival for mutual
funds, but as these products and managers develop track records and
become eligible for Morningstar ratings the sky is the limit for
active ETFs."  
The paper is published by the SEI Knowledge Partnership, which
provides ongoing business intelligence and guidance to SEI's
investment manager clients. To request the full paper, visit
www.seic.com/ActiveETFs. 
About SEI's Investment Manager Services Division 
 SEI's Investment
Manager Services division provides comprehensive operational
outsourcing solutions to support investment managers globally across
a range of registered and unregistered fund structures, diverse
investment strategies and jurisdictions. With expertise covering
traditional and alternative investment vehicles, the division applies
customized operating services, industry-leading technologies, and
practical business and regulatory insights to each client's business
objectives. SEI's resources enable clients to meet the demands of the
marketplace and sharpen business strategies by focusing on their core
competencies. The division has been recently recognized by Buy-Side
Technology as "Best Outsourcing Provider to the Buy Side" and "Best
Fund Administrator," by Hedge Funds World Middle East as "Best
Service Provider," by Global Investor as "Hedge Fund Administrator of
the Year," and by HFMWeek as "Most Innovative Fund Administrator
(Over $30B AUA)" in the U.S. for hedge funds and "Best Administrator
-- Technology Provider" in Europe. For more information, visit
www.seic.com/ims.  
About SEI 
 SEI (NASDAQ: SEIC) is a leading global provider of
investment processing, fund processing, and investment management
business outsourcing solutions that help corporations, financial
institutions, financial advisors, and ultra-high-net-worth families
create and manage wealth. As of December 31, 2012, through its
subsidiaries and partnerships in which the company has a significant
interest, SEI manages or administers $458 billion in mutual fund and
pooled or separately managed assets, including $201 billion in assets
under management and $257 billion in client assets under
administration. For more information, visit www.seic.com. 
Company Contact:
Dana Grosser
SEI
+1 610-676-2459
dgrosser@seic.com 
Media Contact:
Jason Rocker
Braithwaite Communications
+1 215-564-3200 x 110
jrocker@gobraithwaite.com 
 
 
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