OTG's ETF Conversion Brings Latin America's Hidden Opportunities To Light

OTG Asset Management has finalized the launch of the conversion of its OTG Latin America Fund into an exchange-traded fund, which is now listed on the Nasdaq under the ticker OTGL. The transition brings actively managed strategy into the ETF wrapper, providing investors with simpler access to Latin American markets at lower costs and the additional liquidity of intraday trading.

The new OTG Latin America ETF on the list adheres to the fund’s core strategy: an actively managed, research-driven approach to identifying hidden opportunities in Latin America’s rapidly evolving markets.

A New Wrapper For An Old Strategy

OTG is wagering that its “boots-on-the-ground” analysis and structured stock-picking methodology will make OTGL stand out in a market usually neglected by passive managers. The ETF will invest in industries poised to benefit from Latin America’s growing middle class, technological advancements, and abundant natural resources.

By converting to the ETF format, OTGL will offer enhanced tax efficiency and improved trading flexibility without compromising its active investment advantage.

U.S. Mutual Funds Crossing Over To ETFs

The trend of mutual funds transforming into ETFs keeps rising in the U.S. Some notable instances are:

Four mutual funds managed by JPMorgan Asset Management, with combined assets of about $7.2 billion, will be transformed into actively managed ETFs, comprising the Mortgage-Backed Securities, Unconstrained Debt, International Hedged Equity, and U.S. Applied Data Science Value funds.

BlackRock has applied for its GA Disciplined Volatility Equity Fund and GA Dynamic Equity Fund to be converted into ETFs, renamed under the iShares umbrella, with launch set for Sept. 12.

In May, Lazard Asset Management converted its International Equity Advantage mutual fund into an actively managed ETF, the Lazard International Dynamic Equity Fund IEQ.

Fidelity converted six enhanced‑index mutual funds into actively managed ETFs in late 2023. These now‑ETFs have attracted significant inflows and offer commission‑free trading with reduced fee ratios ranging from 0.18% to 0.28%.

Why a wave of conversions? ETFs offer tax efficiency through in-kind redemptions, lower expense ratios, and intraday trading. Numerous managers are merely taking existing approaches to a wrapper investors currently favor, particularly for active management.

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