Northern Trust ETFs: Back For Round II?

by on May 17, 2010

Northern Trust, the Chicago-based investment firm, filed last week for SEC approval on a line of ETFs. The filing didn’t include many details on specific funds, and represent one of the first steps towards bringing exchange-traded products to market. Northern Trust referenced plans for both equity and fixed income products covering the U.S. and international markets.

If the idea of a Northern Trust ETF sounds familiar, that’s because the company has already dabbled in the ETF space once before. In January 2009 Northern Trust announced that it was closing the Northern Exchange Traded Shares (“NETS”) line of ETFs, citing “current market conditions, the inability of the Funds to attract significant market interest since their inception, their future viability as well as prospects for growth in the Funds’ assets in the foreseeable future” (see the full press release).

At the end of 2008, the 17 NETS ETFs had total assets of only about $33 million, but many in the industry saw the shuttering as premature; the funds had been launched less than a year earlier, and had never been given much of a chance to build trading volumes or accumulate assets. Most of the NETS ETFs were single-country international ETFs, targeting everything from Australia to the United Kingdom (and including the first Ireland ETF).

Now, less than 18 months after pulling out, Northern Trust is readying to take another shot at the ETF business. In its most recent filing, Northern Trust noted that “the requested relief is substantially similar to relief previously granted by the Securities and Exchange Commission.” Northern Trust joins a number of other prominent financial institutions gathering around the periphery of the ETF industry; Legg Mason, Goldman Sachs, and T. Rowe Price are among the dozens of firms who have taken at least the preliminary steps towards launching ETFs (see Handicapping The Active ETF Race).

Disclosure: No positions at time of writing.