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 equity ETFs and two active bond funds. At the same time, Allspring Global Investments, the old asset management unit of Wells Fargo that spun out 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 the MFS Active Value ETF (MFSV); MFS Active Growth ETF (MFSG); MFS Active International ETF (MFSI); MFS Active Core Plus Bond ETF (MFSB); and the MFS Active Intermediate Muni Bond ETF (MFSM).
This marks a significant milestone for MFS, one of the few holdouts in entering the ETF market. The asset management firm is credited with introducing the first mutual fund, the Massachusetts Investors Trust, in 1924.
“Since the creation of the mutual fund a hundred years ago, MFS has continually evolved how we deliver long-term value to our clients,” MFS CEO and Chair Michael Roberge said in a statement. “These new active ETFs are an exciting next 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, the Allspring Broad Market Core 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 filed to launch the strategies in June, and 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 go live early next year.
“Our mission to elevate investing involves 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 Allspring’s ETF initiative, said in a statement. “What we heard over and over again was a desire to access our leading 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 the Allspring Broad Market Core Bond ETF.
Some industry observers argue mutual funds’ best days are behind them. They’re bleeding assets in favor of ETFs and separately managed accounts. The fees and incentives baked into mutual funds—good for asset managers, bad for clients—are under pressure too, as cheaper, less conflicted alternatives come into the market.
