At Exchange: An ETF Experience 2022, Stephanie M. Pierce, CEO of Dreyfus, Mellon & Exchange-Traded Funds at BNY Investment Management was celebrating the two-year anniversary of the issuer’s index ETF suite. BNY announced the launch of eight ETFs in April 2020, which were designed to cover the core exposures in a typical asset allocation strategy.
“Investors are really using these products that are at a great value managed by an institutional quality index team that’s been doing this for decades to meet their beta exposure needs,” Pierce told NYSE’s Judy Shaw for ETF Leaders, powered by the New York Stock Exchange.
The BNY executive also expressed her excitement over the active suite of six ETFs added to the issuer’s lineup. “And we’re starting to see a lot of interest in those as well,” Pierce added.
ESG Is “Not Going Away”
When looking at environmental, social, and governance investing, Pierce said that “ESG is a fascinating trend and it’s not going away.”
She noted that interest in ESG investing is “accelerating,” and believes that it’s because “investors want to do well but also do good with their investments.”
“Put simply, the financial return is necessary, but not sufficient,” Pierce said.
So, BNY recently launched “four active sustainable ETFs,” which give investors “not only the opportunity to invest in good companies that are doing the right things and performing well, but also companies that may be improving over time where you get the upside opportunity of an active manager,” she explained.
Ultra-Short Bond ETFs “Gaining a Lot of Traction”
Another trend Pierce is seeing “relates to the uplift in inflation and this expectation now the Fed is going to raise short-term interest rates more quickly than was previously anticipated,” which “has led to some pretty strategic conversations about both the short-term fixed income allocation in the portfolio and the cash allocation.” In these discussions, one topic that regularly comes up is ultra-short bond ETFs, since “ultra-short bond ETFs can allow an investor to shorten up duration but not sacrifice a lot of yield.”
“So, for a more strategic cash allocation or for a bond portfolio where you’re looking for those goals… ultra-short ETFs… are gaining a lot of traction,” Pierce said, adding that the BNY Ultra Short Income ETF (BKUI ) has “one of the lowest fees in the marketplace.” (BKUI has an expense ratio of 12 basis points.)
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