Ahead of Product Debut, RayJay Hires New ETF Leader

That was quick: Raymond James’ asset manager recently brought on a new head for its ETF business, which has yet to launch but is expected to before the end of the year.

Raymond James Investment Management announced last week that it hired Johan Grahn, who helped build up Allianz Investment Management’s ETF product line. Grahn replaces Mo Sparks, whom the firm appointed last year to lead its expansion into ETFs but who left earlier this year for a role as chief product officer at Direxion. Raymond James Investment Management had announced its intentions for the ETF market last year, following up with SEC filings for four products in January of this year. Since then, the firm has delayed the effective date of the registrations for its ETFs, the latest of which would go live Sept. 12. 

“While it is later to enter the ETF market, we have seen room for new entrants to have success with active ETFs,” said Todd Rosenbluth, head of research and editorial at TMX VettaFi. “Capital Group is a great example from a few years ago, but firms like Cohen & Steers, Lazard and MFS are more recent ones.”

Ready, Set, Distribute

The forthcoming actively managed funds are the RJ Chartwell Premium Income, RJ Eagle Municipal Income, RJ Eagle Vertical Income and RJ Eagle GCM Dividend Select Income ETFs. Those products are different from the strategies Raymond James’ subsidiaries have in the mutual fund format. It’s hardly the first brokerage to have affiliates that manage ETFs and mutual funds, but having an army of advisors could obviously help distribution. 

For example: 

• Morgan Stanley’s affiliates Eaton Vance, Calvert and Parametric provide a wide range of funds that are used by advisors generally, not limited to those at Morgan Stanley, Rosenbluth noted.
• Ameriprise Financial has its Columbia Threadneedle, which includes more than $650 billion in assets under management.
• Wells Fargo’s former unit Wells Fargo Asset Management and its affiliates were sold in 2021 to private equity firms and rebranded as Allspring Global Investments, while Wells Fargo retained a minority stake. 

More in Store? Raymond James Investment Management is stepping into the ETF game as the market is being flooded with a record number of new products, many of which are flashy, niche funds, such as leveraged single-stock ETFs. The number may only grow after the Securities and Exchange Commission approves dual share classes, which would let mutual fund companies extend strategies in ETF form.