In news that epitomizes the continued dominance of ETFs as a preferred wrapper for investment products, MFS Investment Management, the century-old mutual fund shop with $626.4 billion in assets, has launched its first ETFs including three active ETFs of equity and two active bond funds. At the same time, Allspring Global Investments, Wells Fargo's legacy asset management unit that emerged in 2021, also executed its previously announced entry into the ETF space with three active fixed-income funds.
MFS filed with the Securities and Exchange Commission in April to create the new ETFs, which will be managed by the same professionals who oversee the firm's existing strategies. They include MFS Active Value ETF (MFSV); MFS Active Growth ETF (MFSG); MFS Active International ETF (MFSI); MFS Active Core Plus Bond ETF (MFSB); AND MFS Active Intermediate Muni Bond ETF (MFSM).
This marks an important milestone for MFS, one of the few barriers to entry in the ETF market. The asset management firm is credited with introducing the first mutual fund, Massachusetts Investors Trust, in 1924.
“Since the creation of the mutual fund one hundred years ago, MFS has continuously evolved how we deliver long-term value to our clients,” MFS CEO and Chairman Michael Roberge said in a statement. “These new active ETFs are another exciting step in that journey. They bring the firm's capabilities to this market for the first time.”
Separately, Allspring Global Investments, an asset manager with $590 billion in assets under advisement, went live with its new ETFs, Allspring Broad Market Bond ETF (AFIX), Allspring Core Plus ETF (APLU) AND Allspring Income Plus ETF (AINP). The ETFs will charge expense ratios of 0.19%, 0.3% and 0.35%, respectively.
The firm submitted to to launch strategies in Juneand all three are based on the firm's active fixed income strategies. The firm also filed with the SEC to launch equity ETFs, which are expected to hit the market early next year.
“Our mission to elevate investments includes actively listening to investors — in particular, the investment advisors who have been key collaborative partners for years,” Rick Genoni, global head of product development and innovation and leader of to Allspring's ETF initiative. “What we heard over and over again was the desire to access our core actively managed strategies in an ETF structure with the liquidity and tax efficiency benefits it brings to the table.”
The team managing the Allspring Core Plus and Allspring Income Plus ETFs will be led by Janet Rilling, senior portfolio manager and head of the Plus Fixed Income team at Allspring. Brandon Kanz, senior portfolio manager and head of credit at Galliard Capital Management, a subsidiary of Allspring, will lead the team managing Allspring's broad market core bond ETF.
Some industry watchers argue that mutual funds' best days are behind them. They are shedding assets in favor of ETFs and separately managed accounts. Fees and incentives built into mutual funds – good for asset managers, bad for clients – are also under pressure as cheaper and less conflicting alternatives come to market.