From fund to franchise.

The shift from mutual funds to ETFs is often framed as a competition between wrappers. It isn't.

For asset managers, the more consequential question is whether their strongest investment strategies can keep pace as investor demand moves across products, platforms, and channels.

For decades, a successful mutual fund could sit at the center of an asset manager’s product strategy. Today, that may no longer be enough. Investors increasingly expect familiar investment capabilities to be available through the vehicles and platforms they use—whether that is an ETF, a separately managed account, or a model portfolio.

ETFs are accelerating this change. Nearly $5.3 trillion flowed into ETFs over a recent five-year period, while long-term mutual funds experienced more than $3 trillion in outflows. Yet assets moving out of a mutual fund do not always leave the manager. They may reappear in another wrapper at the same firm—giving managers an opportunity to reach new demand while protecting the value of established strategies.

That opportunity comes with harder choices. 

Active strategies can benefit from the ETF structure, but moving them into a new wrapper changes the work behind the product. Basket construction, liquidity, trading, and capital markets relationships become part of delivering the strategy well. Managers must determine whether the wrapper supports the investment approach—not simply whether an ETF can be launched.

Distribution adds another layer. As more assets flow through model portfolios, managed accounts, and centralized platforms, strong performance alone may not secure access. An ETF also needs to trade predictably, price reliably, and fit the workflows of the intermediaries that bring it to investors. Decisions made behind the wrapper can directly shape the product’s ability to gain traction.

There is no single path forward. A standalone launch, mutual fund conversion, or SMA migration may each make sense depending on the strategy, investor base, and business model. The challenge is knowing which route can extend a successful investment capability without creating more operational burden than the firm can support.

This is the shift from fund to franchise: moving beyond a single product and building an investment capability that can travel across the structures clients use. It does not require every strategy to appear in every wrapper. It requires a clear view of where each strategy belongs, what it will take to support it, and how the product lineup can adapt as demand changes.

From fund to franchise examines the decisions behind successful ETF expansion—from wrapper fit and migration paths to platform access and capital markets support. Download the full perspective to explore how asset managers can protect established strategies, respond to changing demand, and build a product architecture designed for durable growth.

Complete the form below to access the full perspective.

Information provided by SEI Investments Distribution Co.