From Yahoo Finance.: 2025-06-15 08:00:00

Asset managers are making moves into the ETF space, with big names like Lazard and First Eagle launching their first ETFs. The SEC is expected to approve a dual-share class structure allowing companies to add ETF share classes to mutual funds. These firms are drawn to the tax efficiency and cost-effectiveness of ETFs.

To capture a share of the billions flowing into ETFs, fund companies must invest in building out a platform or use a third-party provider. T. Rowe Price and Capital Group have launched products that mimic existing mutual funds, while Tweedy, Browne introduced a new strategy through its first ETF. The conversion of mutual funds into ETFs presents challenges for investors and fund sponsors.

Russell Investments re-entered the ETF market with a suite of five subadvised active products. Many asset managers have launched ETFs this year, with a total of 44 ETFs introduced by 31 firms. Mutual fund sponsors are eyeing tax savings through the advent of dual-share classes, allowing for potential capital gains relief. Challenges include capacity concerns for active managers and the preference of advisors for unique ETF strategies.

Mutual fund firms like First Eagle and Tweedy, Browne are evolving by exploring ETFs. While some advisors may prefer unique ETF strategies over mutual fund clones, firms are seeking SEC approval for ETF share classes. The ETF world presents a new frontier for legacy firms, driving them to adapt and become part of the evolving landscape.

Read more: Why Some Legacy Mutual Fund Firms Are Finally Exploring ETFs