First Mutual Fund to ETF Conversion Is Slated for Late March

A small mutual-fund provider is slated to make history later this month as the first to convert its products into exchange-traded funds.

Guinness Atkinson Asset Management expects to switch two of its mutual funds on March 26, according to a statement Tuesday.

It will be a milestone moment for the $5.8 trillion ETF industry, which has been gaining ground on the mutual-fund market for years thanks to lower costs, easier access and a preferable tax regime.

The Guinness Atkinson conversions are likely to be just a start -- quant giant Dimensional Fund Advisors is already next in line to switch some of its funds into the ETF wrapper.

“This move represents the culmination of a dialogue we’ve had with our shareholder base, who like many are increasingly attracted to the benefits of ETFs, including their lower costs and greater flexibility,” said Jim Atkinson, chief executive officer of Guinness Atkinson, in the statement.

The conversions will see the Guinness Atkinson Dividend Builder Fund (GAINX) and Guinness Atkinson Asia Pacific Dividend Builder Fund (GAADX) become the SmartETFs Dividend Builder (DIVS) and SmartETFs Asia Pacific Dividend Builder (ADIV), respectively.