Invesco completes its acquisition of Guggenheim’s ETF business

Apr 9th, 2018 | By | Category: ETF and Index News

Invesco has completed its acquisition of Guggenheim Investments‘ ETF division. The business has assets under management of $38.8 billion (as at 28 February 2018), for which Invesco paid $1.2bn.

Dan Draper, global head of ETFs at Invesco

Dan Draper, global head of ETFs at Invesco.

The deal follows the company’s recent acquisition of ETF provider Source, and makes Invesco the fourth largest ETF provider, after BlackRock, Vanguard and SSGA. It raises Invesco’s ETF AUM to over $215bn globally.

We’re confident that Invesco is the right partner and platform to deliver continued value for our former ETF shareholders,” said Jerry W. Miller, president of Guggenheim Investments.  “With the closing of this transaction, Guggenheim Investments takes an important step forward in our growth strategy to focus on active portfolio management for both institutional and individual clients.”

Almost all of the Guggenheim ETFs had been reorganised into Invesco’s family of funds by close of business on 6 April 2018. A small number still need shareholder approval before being reorganised into Invesco ETFs.

Guggenheim’s leading product is the $14.6bn Guggenheim S&P 500 Equal Weight ETF (RSP US), which provides equal-weight exposure to S&P 500 constituents. RSP has an expense ratio of 20bps.

“Since our announcement of the proposed transaction in September 2017, we’ve continued to deliver strong investment performance for our clients and strengthened our business momentum while working toward a successful close of this transaction,” said Martin L. Flanagan, president and CEO of Invesco. “The addition of Guggenheim’s products to Invesco’s strong and diversified range of active, passive and alternative capabilities and expertise will further enhance our ability to meet the investment needs of our clients and deliver the value they seek.”

“We’re excited to add Guggenheim Investments’ complementary ETF business to our existing robust range of factor, smart beta, fixed income and equal weight ETFs,” said Dan Draper, global head of ETFs at Invesco. “This acquisition strengthens our ability to build better and more diversified portfolios through our solutions platform, enhances the range of capabilities available via Jemstep (our advisor-focused digital solution), and helps us better meet the needs of our clients. Our focus continues to be on taking care of clients while leveraging our extensive client-facing distribution force to accelerate the growth of the business.”

Fee reduction for BulletShares ETFs

Invesco has also announced that the management fees on Guggenheim’s BulletShares ETFs, which provide defined-maturity exposure through investment-grade corporate bond portfolios, have been reduced to 10bps (from 24bps), effective immediately.

“The BulletShares ETF suite combines the benefits and precision of individual bonds with the advantages of an ETF to save advisors time while providing better client portfolios and outcomes,” added Draper. “Our research and client feedback shows that the market for a convenient, precise and liquid way to ladder bond portfolios for clients is growing rapidly. With more than a decade of ETF experience and compelling BulletShares pricing, we believe Invesco is providing even better value to existing and future shareholders, and we’re well-positioned to accelerate the growth of this exciting market segment.”

Tags: , , , , , ,

Leave a Comment