Draft:White-Label ETFs

White-Label ETFs refer to exchange-traded funds (ETFs) that are created and managed by one company but are branded and marketed under another company's name. This approach allows asset managers, financial advisors, and other entities to launch their own ETFs without needing the extensive infrastructure and regulatory approvals typically required to create an ETF from scratch.

History and Concept

The concept of white-label ETFs emerged as the ETF market grew, allowing companies to leverage existing ETF platforms to bring new products to market more efficiently. This model is like white-label products in other industries, where products are produced by one company and rebranded for sale by another.

Advantages

1. Cost Efficiency: Reduces the costs associated with setting up and managing an ETF, as the infrastructure and regulatory approvals are already in place.
2. Speed to Market: Accelerates the process of launching an ETF, allowing companies to capitalise on market opportunities more quickly.
3. Focus on Core Competencies: Allows asset managers to focus on portfolio management and investment strategies while outsourcing the operational aspects to specialised ETF service providers.
4. Regulatory Compliance: Ensures adherence to regulatory requirements, as the white-label ETF provider typically handles compliance and reporting.
5. Incubate: An asset manager can incubate with a white-label provider and take the business in-house at a later date.

Key Players

Several companies specialise in offering white-label ETF services, providing a turnkey solution for launching and managing ETFs. Notable providers include (external links at the bottom):

• ALPS Advisors: Known for providing customised white-label ETF solutions.
• Exchange Traded Concepts (ETC): Based in the United States, offering a full range of ETF services.
• HANetf: A prominent European white-label ETF provider. Also offers full distribution capabilities.
• Redwood Investment Management: Offers white-label services focusing on thematic and strategic ETFs.
• Tidal Financial Group: US based white-label provider.

Process of Launching a White-Label ETF

1. Concept Development: The sponsoring company defines the investment strategy and target market for the ETF.
2. Partner Selection: Choosing a white-label ETF provider to handle the operational, regulatory, and administrative aspects.
3. Product Design: Collaborating with the white-label provider to design the ETF, including its structure, underlying index (if applicable), and branding.
4. Regulatory Approval: The white-label provider handles the regulatory filings and approvals required to launch the ETF.
5. Launch and Distribution: Once approved, the ETF is listed on an exchange and marketed to investors under the sponsoring company's brand.

Market Trends

The market for white-label ETFs has been growing, driven by increasing demand for customised investment solutions and the proliferation of thematic and niche ETFs. This trend is expected to continue as more companies seek to enter the ETF market without the associated complexities and costs. ETF.com

Challenges

1. Brand Differentiation: Ensuring that the ETF stands out in a crowded market.
2. Fee Competition: Competing on costs with established ETF providers.
3. Marketing and Distribution: effectively marketing the ETF to reach the target investor base.

Conclusion

White-label ETFs provide an efficient and cost-effective pathway for brands to enter the ETF market, leveraging the expertise and infrastructure of established providers. This model allows brands to offer tailored investment products under their own name, enhancing their product offerings and market presence without the complexities and costs associated with creating and managing ETFs independently.

External Links

• ALPS Advisors Official Website
• Exchange Traded Concepts Official Website
• HANetf Official Website
• Redwood Investment Management Official Website
• Tidal Financial Group