Brown Brothers Harriman (BBH) has supported the industry’s first conversion of a mutual fund to an exchange traded fund (ETF).
Guinness Atkinson Asset Management, a relatively small-sized US asset manager, completed the conversion of two open-end mutual funds to ETFs this week.
BBH holds a long-standing relationship with Guinness Atkinson as custodian, transfer agent and fund accountant for its mutual funds for over a decade, and has also provided ETF support for the firm’s SmartETFs since their inception in 2019.
“We are proud to support Guinness Atkinson in achieving this important industry milestone,” said Ryan Sullivan, head of US ETF servicing at BBH. “This represents a new opportunity for fund managers to bring assets and historic track records to newly listed ETFs and could spark another wave of product development in the ETF market.”
Guinness Atkinson decided to transition the current funds based on growing demand from its shareholder base for access to ETFs and its own previous success in launching three ETF products.
“This conversion represents the culmination of a dialogue we’ve had with our shareholder base, who, like many, are increasingly attracted to the benefits of ETFs, including their lower costs and greater flexibility,” said Jim Atkinson, CEO of Guinness Atkinson Asset Management. “This conversion was possible thanks to the work with our great partners at BBH and we are grateful for their expertise and effort.”
Despite the size of the fund conversion to be relatively small, the move represents a major milestone as the active ETF industry looks to compete against the struggling mutual fund market.
Elsewhere, Citi is working with quant giant Dimensional Fund Advisors to switch six mutual funds with total assets of $20 billion, to the active ETF wrapper during this year.