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Gaining traction on UBS platform critical to future of Eaton Vance's hybrid fund


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Gaining traction on UBS platform critical to future of Eaton Vance's hybrid fund

Eaton Vance Corp.'s patented hybrid product that offers active mutual fund portfolio management inside an exchange-traded fund wrapper has seen only "modest sales" through UBS Financial Services' brokerage platform since the official launch by the distributor in November 2017, according to Chairman, President and CEO Thomas Faust Jr.

The company has pinned its hopes of enhancing the sales of its NextShares products on the UBS platform, where a majority of its so-called actively managed ETFs have yet to clear UBS' due diligence and are still unavailable for purchase, Faust said during an earnings call. With that process expected to be largely completed for various funds within the next month, sales should begin to improve, he added.

He cautioned that it will take some time for the brokerage platform to completely incorporate NextShares as UBS itself is undergoing a significant technological upgrade to roll out a new front-end system for its advisory platforms. Acceleration in sales at UBS could lead more broker/dealers and fund sponsors to embrace the hybrid product, according to the CEO.

"As sales began to flow at UBS, the NextShares structure becomes increasingly attractive, both to additional fund sponsors and to other broker/dealers," the executive said. "We know other organizations ... have sales forces that are very eager to get into UBS and start talking about NextShares, but as of this moment, we really don't have a lot to show for it other than a lot of energy and a lot of excitement."