From CNBC: 2024-10-21 12:48:42

KKM Financial has converted its Essential 40 mutual fund into an ETF to provide investors with a more tax-efficient fund model, allowing them control over capital gains or losses. Asset managers are embracing this shift, with active equity mutual funds declining to a 24-year low. The ETF will trade on Nasdaq under the ticker ESN, with holdings including JPMorgan Chase, Amazon, Waste Management, and Eli Lilly.

The newly converted KKM fund, with the goal of “buy what you use,” will maintain its equal-weighted strategy. The previous mutual fund version had a three-star Morningstar rating, outperforming the category average during market downturns. Equal-weighted funds have been popular this year due to concerns over the market’s reliance on certain stocks. The ETF is up 16% year to date before its conversion, with an expense ratio of 0.70%.

Many asset managers are converting mutual funds to ETFs due to tax efficiency and regulatory changes, while reshaping their investment strategies. Equal-weighted funds have shown resilience during market downturns and are gaining popularity among investors. The newly converted KKM ETF, with holdings like JPMorgan Chase and Amazon, aims to deliver strong performance and stability in the current market environment.

Read more: KKM Financial’s Essential 40 stock fund is now an ETF