Exchange-traded fund firms can now unite behind a new banner. John Hyland
, chief investment officer of United States Commodity Funds
] will head up a new ETF trade association. The National Exchange Traded Funds Association (NEFTA
) will offer membership to any Exchange Traded Fund issuer or sponsor.
There is also a class of membership for firms that are active in the ETF industry, but are not issuers of ETFs. Hyland will chair the new trade group.
"In the 20 years since the first US ETF launched, the industry has grown to over $1.2 trillion in assets, over 1,400 funds, and approximately two dozen different issuers," Hyland said. "This is an ideal time for the industry to establish its own industry trade group to represent and promote the ETF sector."
NAFTA's main areas of advocacy will be: education on ETFs for institutional and retail investors, as well as advisors; data collection; and interfacing with government entities and the media on ETF issues.
Company Press Release
DENVER, April 23, 2012 /PRNewswire/ -- Senior executives of leading US-based exchange-traded fund ("ETF") companies have agreed to launch the National Exchange Traded Funds Association ("NETFA"), an independent national trade association that will represent and promote the US ETF industry.
The focus of the NETFA is to educate institutional and retail investors, as well as the advisor community, on the benefits and uses of ETFs. NETFA will provide industry statistics and commentary on ETF related issues to the US financial media, and advance industry issues with regulators, government agencies and interested third parties.
"In the 20 years since the first US ETF launched, the industry has grown to over $1.2 trillion in assets, over 1400 funds, and approximately 2 dozen different issuers. This is an ideal time for the industry to establish its own industry trade group to represent and promote the ETF sector," stated the new Chairman of NETFA, John Hyland.
NETFA's new Vice-Chairman, Adam Patti adds, "Once an industry sector achieves a certain scale, it can no longer depend on ad-hoc efforts by individual companies, or the efforts of non-ETF industry groups, to represent itself to the public or to the regulators. This is the first step in a long journey to establish a professional and coordinated approach to the topics of investor education and industry representation."
Increasingly, investors are choosing to use ETFs for their investment needs. Over the last five years, assets in US-listed ETFs have grown an average of 24% annually, from $408 billion on December 29, 2006 to $1,211 billion as of March 30, 2012. There are over 1,400 ETFs listed on US exchanges as of March 30, 2012 (source: 2011 ICI Factbook, Index Universe).
Membership in NETFA will be open to any Exchange Traded Fund issuer or sponsor. There is also a class of membership for firms that are active in the ETF industry, but are not issuers of ETFs.
What is an ETF?
An Exchange-Traded Fund is a commingled investment fund that has the following additional attributes:
It is listed and traded on a recognized securities exchange, either in the United States or elsewhere.
It publishes an end-of-the-day Net Asset Value ("NAV").
It publishes or causes to publish an Indicative NAV during the trading day.
It allows the creation and redemption of shares at NAV.
It represents an interest in an underlying portfolio of investments.
In contrast to the US-centric approach to the definition of ETFs put forth by some, Mr. Hyland stated, "Although at present NETFA seeks to represent the US ETF industry, we are certainly not so parochial as to claim that only US-based ETFs are 'real' ETFs. ETFs are now found in all developed markets." He went further to say, "In addition they now have a wide range of investment objective, portfolio styles, and permissible investment holdings. ETFs around the world are about more than just owning a static basket of large cap stocks tied to a traditional index or benchmark".
The National ETF Association is the national body of exchange traded fund providers. US investors have approximately $1.2 trillion invested in over 1,400 US-listed ETFs. As ETF usage continues to grow in the US, the NETFA will seek to educate the public on the appropriate usage of exchange traded funds, as well as work proactively with members and regulators to ensure the ETF industry adopts best practice standards.
Stay ahead of the news ... Sign up for our email alerts now