ETF Playbook - drawing up a game plan for ETF success | KPMG | IE

ETF Playbook: drawing up a game plan for ETF success

ETF Playbook: drawing up a game plan for ETF success

ETFs are creating dynamic and innovative investment strategies, and ‘actively managed’ ETFs represent the next generation of innovation.

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Introduction

Are you thinking about taking the plunge and entering the exchange traded funds (ETF) game? Have you already begun drawing up some plays and taken initial steps towards forming a fund, or are you on the verge of launching one?

Or maybe you’ve launched your ETF, but haven’t yet experienced success?

You’ve seen the great potential for success. But you’re also aware of some well-publicised, titanic failures that have taken place.

While the ETF space is growing by leaps and bounds, the playing field is replete with funds that were stopped in their tracks. In fact, of the 204 ETFs that launched in 2014, 92 have gained less than $10 million each in assets - that’s a 45 percent flop rate. And it’s getting harder for new launches to break through and score.

So what can you do to bolster your chances of being one of the few to win the game, and more importantly, keep the winning streak going?

To help you reach these goals, we have prepared this publication, which is designed to enhance your game plan for success, and help you gain a thorough understanding of the ETF landscape, complete with both pitfalls and potential.

Here, we will explore the significant and growing “ETF opportunity” and then address some essential elements needed to launch and operate a successful ETF. These include the necessity of having the right:

  • Product to market
  • Distribution game plan
  • Execution strategy
  • Taxation of ETFs as compared to mutual funds
  • Operations and technology
  • Formation and launch
  • Audit and regulatory requirements for ETFs as compared to mutual funds
  • Sales and distribution

This result will feature case studies of ETFs that made it through and those that were knocked out of contention early, as well as practical, actionable lessons that can be gleaned from each.

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