Powering Active ETFs 

Traditionally, ETFs were almost synonymous with passive index investing, and ETF assets are often used as a proxy for index investing growth. However, recently, roughly half of launches have been actively managed strategies - in equities, fixed income, commodities and crypto, along with related derivatives, futures and options. This shift is driven by tax efficiency in certain markets and increasing demand for better liquidity and transparency in others. 

Are operational frameworks developed for index rebalancing (which is typically quarterly with some flows and corporate actions in the interim) fit for purpose when active strategies can change their portfolio baskets several times a day – and crypto markets trade 24/7?

Real-time updates are essential so that market makers can accurately price active ETFs and maintain liquidity and tight bid offer spreads. Clunky CSV files are not the most efficient way to keep abreast of dynamic and active strategies. A flexible cloud-based smart API that automatically updates portfolios is far better suited to the task than on-premise flat file solutions that risk slowing down critical update cycles.

APIs also provide a timestamped audit trail, which is vital for regulatory compliance and best execution reporting. A flexible API model can seamlessly integrate new data sources and formats as active strategies evolve and explore new markets and trading venues. 

ULTUMUS is the world’s largest third-party ETF calculation agent. The natural scalability of our model supports more competitive and predictable capped pricing. We provide 24/5 global support via phone, email, and instant messaging, from seasoned ETF experts.