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HomeWealth ManagementNeuberger Berman to Convert Its Solely US Commodity Fund Into ETF

Neuberger Berman to Convert Its Solely US Commodity Fund Into ETF


 

(Bloomberg) — Neuberger Berman is planning to transform its solely US commodity mutual fund into an ETF, the most recent asset supervisor hopping on a development anticipated to pump $1 trillion into the ETF ecosystem. 

The $233 million Neuberger Berman Commodity Technique Fund (NRBAX) is ready to turn into an lively, totally clear ETF within the fourth quarter of 2022, in keeping with regulatory filings. The change brings Neuberger Berman’s exchange-traded fund lineup to 4, and can immediately increase its belongings within the trade. The corporate’s first ETFs, launched in April, have solely managed to assemble a mixed $16 million in belongings to date.  

The New York-based agency joins an array of asset managers which have already shifted billions from mutual funds into usually lower-cost, extra tax-efficient ETFs. Dimensional Fund Advisors executed one of many first formal conversions in 2021. JPMorgan transformed 4 mutual funds this yr, whereas smaller retailers together with Guinness Atkinson and Motley Idiot have additionally made the change. 

“Neuberger Berman is intelligent in cautiously testing ETF floor whereas defending their current mutual fund lineup,” stated Henry Jim, a Bloomberg Intelligence ETF analyst. “If the conversion pans out they might take into account changing others.” 

Within the coming decade, greater than $1 trillion value of mutual fund belongings could possibly be transformed into ETFs, in keeping with an evaluation by Bloomberg Intelligence. That will be an enormous increase to the $6.5 trillion US ETF market, although it’s solely a fraction of the mutual fund world. 

Roughly $598 billion has exited mutual funds in 2022 to date, knowledge from the Funding Firm Institute present. In the meantime, ETFs have raked in over $369 billion this yr, although the tempo has slowed from 2021’s report inflow, in keeping with Bloomberg compiled knowledge.

A spokesperson for Neuberger Berman confirmed the plans in emailed feedback, including that the agency intends for the conversion to happen on or round Oct. 14, 2022. The expense ratio of the brand new fund will probably be 0.65%, cheaper than charges on the varied share courses of the mutual fund. 

–With help from Katie Greifeld.

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