If Your Mutual Fund Becomes an ETF, Here’s Why

Index funds emerged from the world of mutual funds in the early 1970s, and two decades later they helped create the first exchange-traded funds. Now, in the latest asset management evolution, some mutual funds are converting into ETFs in what could be the start of a trend across Wall Street. In the process, money managers embracing the new wrapper are set to accelerate the shift of assets into the already rapidly growing ETF industry.

Yes. A small mutual fund provider called Guinness Atkinson Asset Management became the first, when it converted two of its mutual funds into the SmartETFs Dividend Builder (DIVS) and SmartETFs Asia Pacific Dividend Builder (ADIV) in late March. That was a milestone moment for the $5.9 trillion ETF industry and is expected to pave the path for more conversions in the future.