When Dynamic Funds and BlackRock announced they were teaming up, most industry insiders were caught off guard
Back in November 2016, when Dynamic Funds and BlackRock announced they were teaming up to launch a suite of five actively managed exchange-traded funds, most industry insiders were caught off guard.
Bringing the two brands together to create the Dynamic iShares Active ETFs felt significant, and it was. It was the first time that BlackRock had entered into such a partnership with another asset manager in Canada.
The first five ETFs were launched in late January and then, on September 27, the two firms solidified their partnership with the launch of three new actively managed ETFs. It’s a partnership that appears to be blossoming, but it was some time in the making and was the result of ongoing conversations over a two year period.
“There was a good symbiosis, and we saw the opportunity to launch actively managed ETFs that would complement what we do on the mutual fund side,” says Mark Brisley, Managing Director, Dynamic Funds. “We are voracious supporters of actively managed portfolio management and BlackRock is one of the largest providers of ETFs in the world. They also have a significant active management business themselves in the U.S.”
From Dynamic’s perspective, the partnership has enabled the firm to build and create portfolios in an ETF structure while avoiding the costs associated with setting up the back office functions required to run an ETF business. It’s been a win-win for both investment firms, but Brisley has also received a lot of positive feedback from advisors and investors.
“Brokers and advisors using our ETF products are thrilled that they are able to pick up the phone and dial into BlackRock for product and trading support,” he says. “Our product development team works closely and collaboratively with their product, legal, and product structure teams, so every launch is a real joint effort.”
As well as being caught off guard by the partnership, some people were surprised that an actively managed shop like Dynamic was entering the ETF space at all. However, the firm has never been “anti-ETF”, as Brisley explains, they have simply chosen to remain active and not become an index-based entity.
Brisley is pleased with the performance of the ETFs launched back in January. The active preferred shares ETF (DXP) has performed particularly well. “It has been knockout winner from the minute it launched,” Brisley says. “We were doing very well with our preferred shares mutual fund and now we are doing as well, if not better from a velocity standpoint, with our ETF version.”
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