2 Weeks, $1 Billion For This New ETF

In the world of exchange traded funds, experts and industry observers often say a new ETF needs to get to $100 million in assets under management to become profitable for the issuer and be “legitimized.”

Getting to $1 billion, however, is a different ballgame. One new ETF is breaking the mold on asset-gathering expectations for rookie funds.

What Happened

As has been previously highlighted in this space, some new ETFs from JPMorgan Chase & Co. JPM are rapidly attracting assets. That includes the JPMorgan BetaBuilders Canada ETF BBCA.

Here's the BBCA asset-gathering breakdown in the simplest terms: the ETF debuted on Aug. 7. By Aug. 20, it had $1.28 billion in assets under management, according to issuer data.

Why It's Important

As ETF.com reports, BBCA is the second-fastest ETF to $1 billion in assets under management. The new Canada ETF supplanted its stablemate, the JPMorgan BetaBuilders Japan ETF BBJP as the second-fastest ETF to $1 billion.

Only the SPDR Gold Shares GLD was faster to $1 billion in assets, reaching that enviable milestone in just three days.

Here's another way of looking at BBCA's asset-gathering prowess. The iShares MSCI Canada ETF EWC is the largest U.S.-listed Canada ETF and has $3 billion in assets under management, but EWC is almost 23 years old. It took BBCA just two weeks to become more than a third of the size of competing fund that's more than two decades old.

What's Next

Clearly, BBCA and EWC are headed for a tussle among U.S.-listed Canada ETFs. The new JPMorgan ETF holds 94 stocks compared to 91 in EWC. The iShares ETF devotes almost 63 percent of its combined weight to the financial services and energy sectors, comparable to the 61.3 percent allocated to those groups by JPMorgan's BBCA.

The marquee difference is fees. As in BBCA charges just 0.19 percent per year compared to 0.49 percent by EWC.

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