(HedgeCo.Net) Another noteworthy theme to watch this week: major asset managers are converting existing mutual funds in the liquid-alternative space into the ETF wrapper. For example, SEI Investments announced the conversion of its multi-strategy liquid alts mutual fund into an ETF (ticker “QALT”). ETF Express
Why does this matter?
- ETFs are increasingly the preferred wrapper for many investors due to lower cost, intraday tradability, transparency of holdings and tax efficiency. By migrating alternative strategies into ETFs, managers aim to tap broader demand.
- The move reflects how liquid alts are moving from niche institutional products to more widely accessible building blocks in retail and advisory portfolios.
- It may also accelerate competition: as more firms bring liquid-alt ETFs to market, fee pressure may mount, product innovation may increase, and access improves.
What to look for:
- Whether these converted ETFs gain meaningful AUM and how advisors/portfolios incorporate them.
- Whether strategy performance matches or beats the older mutual fund format (which is sometimes incumbently advantaged).
- Whether the structural complexity (e.g., alternatives oversight, derivatives usage, hedging) is well understood within an ETF wrapper.
For the investor community, this trend signals that liquid alts have matured: wrappers, access and positioning are evolving beyond “alternative” status. But investor vigilance remains key.