BNY Mellon Asset Servicing provides clients with a turnkey solution to entry into the ETF market, and as such offers extensive support as a full service provider. ETF basket creation and calculation, global custody services, fund accounting and administration, distribution support through Pershing, transfer agency services and derivatives collateral management are just some of the areas in which the firm delivers its expertise.
Speaking with etfexpress, Brian Brennan, Vice President BNY Mellon Asset Servicing, says that ETF asset and net new inflow growth continues to be robust, not only for BNY Mellon customers, “but for the industry overall”. BNY Mellon AUM growth outpaced the ETF industry overall with 9.2 percent growth in 2011 and has already outpaced the industry with 8.8 percent growth over the first six months of 2012.
“Net new inflows continue to be very robust, with BNY Mellon garnering 20 per cent of all net new inflows in 2011 and on track to outpace that figure for 2012 YTD,” confirms Brennan.
In terms of market share, BNY Mellon Asset Servicing supports 44 per cent of US listed products.
As for emerging product themes, 2011 was somewhat of a mixed bag with Brennan noting that BNY Mellon had a wide range and large number of ETF product launches “including actively managed, fixed income, emerging markets, international/country-specific, and commodity ETFs. Fixed income ETFs received the highest portion of net new inflows last year, and so far are dominating 2012 net new inflows.”
The firm’s market leading position is underscored by the fact that it supports 25 out of the 29 current US ETF sponsors, equivalent to over USD250billion in AUM. Brennan notes that not only does BNY Mellon support the widest range of ETFs, it also has a long track record of innovation.
Some of the many firsts that BNY Mellon has supported since 1995 with the launch of the Mid Cap SPDR fund include:
- Europe’s first ETFs – the Merrill Lynch LDRS
- First Fixed Income ETF – FITRS
- First Hard Commodity ETF – SPDR Gold Trust
- First Actively Managed ETFs – PowerShares
- First Currency ETF – Rydex.
Adds Brennan: “BNY Mellon also takes a proactive approach to helping their ETF customers achieve success in both the primary and secondary markets, whether it is cutting edge technology which automates the ETF creation and redemption process, or creating forums for their ETF customers to reach select audiences.”
EPIC is BNY Mellon’s proprietary ETF technology. Within this lies InvestOne, a fund accounting module. One of the key challenges that BNY Mellon sees for the ETF industry overall is the need for investor and industry education focusing on the risks of ETF investing and the “myths about some of those risks”, says Brennan.
“The industry is under a great deal of scrutiny from a regulatory perspective, and these concerns are legitimate. Both BNY Mellon and the ETF industry need to take a proactive approach to continued industry dialogue, evaluation of resources to enhance ETF oversight, and to extend thought leadership via targeted media and advisor outreach.”
On winning the award, Joe Keenan (pictured), Head of Global ETF Services, comments: “We are delighted to win this prestigious award as it is a validation by prospects and clients of our high quality service.”
