And then we had quite a few successes as Jenny mentioned in her remarks, in ETFs, Canvas, separately managed accounts. And all these things are lower fee rate businesses. It’s less about fee erosion per se. I’d say, it’s just more about the business mix. So for the next quarter specifically, we expect EFR to probably be even in the high 37, so let’s say, high 37 to 38, but this is because of the success that we didn’t anticipate as much success with Putnam because the overall Putnam business is a lower effective fee rate. They’re kind of in the mid-35s.
Faster inflows from Great-West Life at the lower end as we communicated, hopefully, clearly enough that those — the $25 billion of AUM that we expect to come in from Great-West Life, that will ultimately, when we get it all in, that will be in the mid-teens. But the initial amount that we’ve got are all in the lower fee categories, things like investment-grade credit, for example, for general account. But then on top of that, we expect continued growth in our ETF, Canvas and separately managed accounts, all of which are lower fee rates.
Now the reason why we keep the guide for the year in the 38s is because we have a view, again, as Jenny mentioned, of our alternative asset fundraising capabilities and expectations for the next 12 months, let’s call it. So on an annual basis, we expect the mix of business around alternative assets, equities, fixed income and then these other areas of growth that I just mentioned, to offset the fee reductions that at times in various quarters could go into the high 37s, but that’s just based for that 1 quarter — on the mix that 1 quarter. But for the year, we expect to remain fairly stable in the 38 area.
Operator: Next question will be from Ken Worthington at JPMorgan.
Kenneth Worthington: On the institutional pipeline, when you win an institutional fixed income mandate, are you getting a bunch of cash? Or are you getting a portfolio of securities that you transition and then remanage and do you get a sense of where the assets are coming from? If it’s going into fixed income, is it investors going from rates to credit? Are they going from equities to fixed income? Are they going from cash to fixed income? Or are they just switching managers because of performance? So any view on what you’ve seen in this pipeline that’s driving the fixed income success you’re having?
Adam Spector: You might not like the answer, but the answer is yes. I think we’re seeing all of those things, right? So often, people will switch managers because of performance. We see people beginning to extend duration out. Those are usually funded by cash. We should see some of the plus sectors being added to those are funded in a mix of different ways. And then, of course, on the retail side, it’s typically a sale of a fund, so you really don’t know where that’s coming from.
In terms of how folks fund things I would say that’s a mix. We see 3 different ways. We see it being funded in cash. We see people using a transition manager and then sometimes we’ll see folks fund to us with securities and ask us to get to the new point by a certain time. The other interesting thing we see in terms of how accounts are funded is actually outside of fixed income on the Canvas side, where we see significant use cases for Canvas as a tool to aid in the funding of accounts for taxable accounts we’re able to do that in a much more tax-efficient way.
Kenneth Worthington: Okay. Great. And just on ETFs, how are you thinking about ETFs outside the U.S.? You’re having nice success in your franchise within the States. How are you thinking about leveraging the brand? Or are you thinking about leveraging the brand you have and the ETF franchise that you’ve already built?
Adam Spector: Yes. Our ETFs outside of the U.S. have grown in 2 important ways. One, I don’t think this was the point of your question, but our single country ETFs, so ETFs that focus on the country, even if they’re sold in the U.S. That’s been a huge success for us. We were able to price those very competitively. But also in terms of ETFs that we’re selling outside of the U.S. regardless of investment mandate, we’ve seen real growth there in Canada and in EMEA, in particular. Some of that is the single country flow. As Jenny mentioned in his remarks, we’ve seen some of the more sustainably oriented products go quite well. Green bonds, Paris-aligned, S&P 500 would be 2 that are examples of that.
Outside of the U.S., we continue to see a mix of active, passive and smart beta. Passive is still the most significant portion of the market, but active has by far the highest growth rate.
And just to put things into context, I believe that if you look at our flow for this quarter, about half of it or so was from outside of the U.S. in terms of our ETF business. So really trying to expand that to the best we can and seeing very good results.
Operator: Next question will be from Alex Blostein at Goldman Sachs.
Alexander Blostein: Jenny, I was hoping to dig into your comments from the prepared remarks when you talked about being quite busy over the next 12 months with respect to private markets. Could you, I guess, expand on that a little bit? And I’m assuming wealth is going to be part of the answer. So when you think about the opportunity set in the wealth channel and lots of other folks coming in, with offerings already and it seems like that part of the market is getting a little bit busier. What are you guys doing to make sure you don’t miss the window and opportunity there?
