As the introduction of new exchange traded funds (ETFs) begins to slow, so too is the fear that related job creation will begin to dwindle as well. ETF hiring has been one of the few bright spots in an otherwise dismal hiring picture, with consistent hiring for fund managers, analysts, quants, business and product development staff and sales and marketing personnel.
According to the Investment Company Institute, the number of exchange traded funds increased only slightly in May, inching up to 1,212 from 1,207 in the month prior. The current slowdown, say experts, appears to be inevitable, given the maturing of the market. But even with the slowdown in introductions, interest in ETFs isn’t waning, especially given the asset base in ETFs. Cerulli Associates found that 2011 was the first year-end where the asset base in ETFs grew beyond the trillion-dollar mark.
Bullish Predictions for ETFs
Research from Cerulli Associates also shows that the majority of sponsors surveyed—63 percent—were bullish that ETFs would continue to grow in 2012. Acceleration was predicted especially within the U.S. equity ETFs space. Given the bright predictions, just what sort of job expansion might be generated? According to Cerulli Associates, marketing, sales and distribution will be a big emphasis in the coming months, as the larger sponsors look to greater adoption by financial advisors to continue to boost ETF growth.
On the distribution side, ProShares recently announced three key hires and the creation of a New York City office to support expansion of its alternative exchange traded funds lineup. According to the press release, “The New York office will be used to enhance the firm’s education and distribution capabilities, including its institutional efforts. The office, located at 400 Madison Avenue, is ProShares’ first office outside of Bethesda, MD, where the firm is headquartered.”
Hiring Strong for Research
ETF interest is fueling hiring and promotions on the research side too. Morningstar announced several appointments within its fund analyst research team, especially as it moves to expand its research to ETFs. Scott Burns was recently named director of fund analysis for North America. Burns was previously the director of ETF, closed-end, and alternative fund research. In this new position, he will also lead the mutual fund analyst teams in the U.S. and Canada. Michael Herbst was promoted to director of active strategy research. Paul Justice and Ben Johnson will co-lead coverage of passive strategy research, including ETFs and traditional index funds. Nadia Papagiannis will continue to lead Morningstar's alternative fund research, covering alternative mutual funds and alternative ETFs. Laura Lutton will be responsible for leading fund-of-fund research, including managed ETF portfolios, 529 college savings plans and target-date funds.
Bump in Actively-Managed ETFs
With a growing number of sponsors applying to the SEC for approval of actively-managed ETFs, the rollout of new ETFs is predicted to pick up speed once again, and so too will additional hiring. Franklin Templeton is just one of the latest to file, following recent filings by T. Rowe Price, J.P. Morgan, Federated Investors, Dreyfus and Legg Mason. And, according to a report from Cerulli Associates, Eaton Vance is launching “the first exchange-traded mutual fund (ETMF), which will trade like an ETF but is based on the end of the day NAV similar to a mutual fund—creating a hybrid vehicle.”