MutualFundWire.com: Most AMs Are Planning ETF Share Classes, But ...

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Friday, May 30, 2025

Most AMs Are Planning ETF Share Classes, But ...

Most asset managers are not racing for the ETF share class finish line, though most are planning to offer them eventually, according to new research from the folks at a Boston-area consulting ally to fundsters.

Cindy Zarker
FUSE Research Network
Relationship Manager

On Tuesday (May 27), Cindy Zarker, relationship manager at Fuse Research Network, revealed new research findings, based on a late-April-to-early-May Fuse survey. Zarker tells MFWire that "23 firms responded to the quick pulse poll, ranging in size from $3B to nearly $900B AUM (based on mutual fund and ETF assets combined as of 3/31/2025)."

22 percent of those responding asset managers said they aim to be in the first wave of firms launching Vanguard-esque ETF share classes (aka dual share classes) following SEC approval, while 30 percent said they plan to be in wave 2 or 3. 35 percent (a plurality, but not a majority) said their ETF share class plans are still TBD. And 13 percent said they have no plans to launch ETF share classes.

"Most managers are taking a cautious approach to dual share class," Zarker states.

"A sizeable group of firms (47.8%) are still determining their plan or have no plans to launch ETF as a share class," Zarker adds in an emailed statement.

The Fuse team's research also offers some further insights into the level of detail going in AMs' plans around ETF share classes.

"Approximately 70% of managers have a specific number of ETF share classes in mind—most planning to launch between one and three, with a notable portion targeting four to twenty — and no managers intend to introduce more than 20 share classes initially," Zarker writes. "Most asset managers have already assembled a working group that has been meeting regularly, or they are in the process of forming a working group to address the operational aspects of launching ETF share classes."

Yet fundsters do see hurdles in the way of ETF share class development.

"The most frequently cited challenges and impediments to the successful implementation and launch of dual share classes are operational and lack of broker dealer support, and to a lesser extent fee implications and tax efficiency," Zarker writes.

Printed from: MFWire.com/story.asp?s=69969

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