Weird $200 Million-Per-Day ETF Flow Is Internal Nuveen Switch
(Bloomberg) -- Mystery solved: The strangely repetitive $200 million near-daily inflow to a growth ETF over the past month is actually an internal transfer by the fund’s parent.
The cash injections to the Nuveen Growth Opportunities exchange-traded fund (ticker NUGO) are coming from its mutual funds, Nuveen said Friday in an email to Bloomberg.
The unusual allocation pattern -- like clockwork near the 4 p.m. close in New York -- has caused some head-scratching among market watchers. Ordinarily an ETF launches with cash lined up that is added in a lump sum in the first few days, or it relies on often-choppy organic flows.
“The strategic allocation of TIAA-CREF Lifestyle and Lifecycle funds to NUGO reflects Nuveen’s outlook on areas of opportunity in global equities to improve risk-adjusted returns and enhance retirement outcomes for investors,” Jordan Farris, head of ETF product for Nuveen, said by email.
The firm didn’t confirm exactly where the money was shifting from, but the NUGO flows roughly match up with estimated outflows from the TIAA-CREF Large-Cap Growth Index Fund (TILIX), according to data compiled by Bloomberg. Both focus on large-cap growth companies and are overseen by Nuveen, whose parent is the Teachers Insurance and Annuity Association of America, or TIAA.
It remains unclear how much will be transferred. NUGO’s atypical seeding pattern may come down to its structure, according to Bloomberg Intelligence. It’s one of a new breed of ETF with lower disclosure requirements that help hide its exact strategy, sometimes known as ANTs, or active non-transparent.
“I wouldn’t be surprised if the market makers are telling them ‘we’d rather not have more than X for the day’ because it’s an ANT ETF and new,” said Athanasios Psarofagis, an ETF analyst with Bloomberg Intelligence.
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