ETF Support Services

For managers with an established ETF or those who may be looking to create one, Archer provides technology-enabled services that help reduce the operational burden of managing an ETF. Archer supports the underlying ETF portfolio with global data exchanges, multiple sub-accounting streams, real-time positions, and dispersion reporting. Working in concert with a consolidator of Authorized Participant activity, your custodians, and your fund accountant, Archer enables the effective deployment of your investment strategy as an ETF.

Efficiently manage authorized participant transactions

Exchange-traded funds continue to gain steam in the investment world, reaching nearly $4 trillion toward the end of 2017. This growth has been remarkably fast, and ETF assets are projected to reach more than $7 trillion by 2020. As investors continue to favor ETFs, investment management firms have an opportunity to broaden distribution of their investment strategies, increase assets, and effectively join in coopetition with emerging robo-advisors.

While ETF opportunities are plentiful, ETF operational challenges can be substantial. The ETF share creation and redemption process increases IBOR complexity and generates an IBOR-in-motion as settled and unsettled trades across global markets conflict with the manager’s need for a fully reconciled portfolio in advance of the US market open.

Extreme discipline and technology-assisted efficiency are paramount to the timely processing and reconciliation of ETF portfolios. Archer provides ETF support services that include:

  • consolidating and booking Authorized Participant receives/delivers and cash-in-lieu
  • reconciling the underlying portfolio to custodian and Futures Broker records
  • sharing information with the ETF fund accountant.
Accurately maintain the underlying securities portfolio

Whether you choose to leverage the Archer Order Management System or a third-party OMS, the underlying ETF securities portfolio may be tracked on Archer, with intraday updates of securities trades and post-close updates of authorized participant transactions.

The result is an up-to-the-minute view of portfolio holdings and valuations which may be tracked against an index, evaluated for drift, and segregated into sub-portfolios for tracking against sub- or micro-indexes.

Archer helps managers mitigate variability by accommodating hedge strategies. Hedge portfolios are established with accompanying collateral, and variation margin is paid from and to the hedge account. Combined views of the hedge with the underlying securities account permit a fully allocated view of portfolio performance.

 
Reduce the Burden of Managing ETFs
 

Establish and trade the underlying securities portfolio with sub-accounting streams for performance tracking and variation margin

Consolidate and book Authorized Participant receives/delivers and cash-in-lieu

Reconcile the underlying portfolio to custodian and Futures Broker records

Share information with the ETF fund accountant