Industry Updates

American Century to enter Europe with three active ETFs

The ETFs will be run by the group’s quantitative investment unit

Theo Andrew

American Century

American Century is set to be the latest US asset manager to enter the European ETF market with three active ETFs.

The US asset manager has registered its fund platform in Ireland and has filed for three ETFs investing in global, global value smaller companies and emerging market equities.

It is the latest sign the European ETF market is set to become a key arena for US issuers following Janus Henderson’s acquisition of fixed income specialist Tabula Investment Management and Pacer ETF’s three-strong launch in May.

The three ETFs are to be launched by Avantis Investors, the group’s quantitative investment unit, headed up by the firm’s CIO Eduardo Repetto.

The Missouri-based asset manager has three US-listed equivalent ETFs, the $6bn Avantis International Small Cap Value ETF, the $5.6bn Avantis Emerging Markets Equity ETF and the $365m Avantis All Equity Markets ETF.

The group houses roughly $45bn assets under management (AUM) across 46 ETFs, with Avantis Investors accounting for a large majority of the assets at just over $42bn.

American Century launched the first non-transparent active ETFs in the US in 2020 – a concept not yet allowed in Europe – with both failing to gather significant assets.

The approach is designed to shield an active manager’s holdings where it thinks it can generate high alpha.

Active ETFs are set to become the next big battleground for ETF issuers in Europe.

In September 2023, Cathie Wood’s ARK acquired thematic ETF issuer Rize ETF in a £5.25m deal to establish itself on the continent while Italian asset manager Eurizon Capital is set to enter the European market with the launch of an active ETF.

Over the past 18 months, the likes of abrdn, AXA Investment Managers, Horizon Kinetics, Robeco and Investlinx have all launched ETFs in Europe for the first time.

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