Fuse Blog

Semi-Transparent ETFs Surpass $1B as of January 31, 2021

During 2020, 19 semi-transparent ETFs were launched. American Century was the first to the plate with Focused Dynamic Growth ETF and Focused Large Cap Value ETF. Since then, Legg Mason (now Franklin Templeton), Fidelity, T. Rowe Price, Natixis, and Invesco have each launched at least one product. Through the end of January 2021, only four semi-transparent ETFs had more than $100 million in assets. American Century, which manages half of all semi-transparent ETFs, boasts three out of the four largest ETFs. However, Fidelity’s Blue Chip Growth ETF is the largest fund, amassing $240 million since it was launched in June 2020. Over the past four months, Fidelity’s semi-transparent ETF lineup has grown by 180% followed by T. Rowe Price (113%) and American Century (39%). Growth for both Fidelity and T. Rowe Price was mainly driven by their Blue Chip Growth ETFs, which more than doubled in AUM. This is not necessarily surprising given these are new funds and started with smaller asset bases. In terms of cost, it is surprising that American Century has the four lowest cost options. For example, American Century’s Large Cap Growth ETF is 14 bps less than Fidelity’s and 12 bps lower than T. Rowe Price’s. Currently, management fees do not appear to be a critical issue for new investors. FUSE anticipates this will change as more competition enters throughout 2021, especially as larger firms like BlackRock, American Funds, and JPMorgan likely enter this new market.

Semi-Transparent ETFs by AUM and Number of Products

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Sources: Morningstar, FUSE Research