10.07.19

Non-Transparent ETFs Lure Asset Managers

by: Emile Hallez

American Century Investments was the first fund manager to get the SEC's approval to bring “non-transparent” exchange-traded funds to the market, under a framework licensed from Precidian Investments that allows the ETFs to avoid disclosing their complete portfolio holdings daily. Now, other companies are queueing up to use the same design. Ed Rosenberg, head of exchanged traded funds at American Century, says that because asset managers have been concerned about the “risk of being front run” by competitors, many have avoided dabbling with ETFs, instead offering actively managed products in the form of mutual funds, Because of that, the ETF market is “missing active [fund] sponsors' best ideas," says Rosenberg. Fidelity, T Rowe Price, and Natixis are currently seeking permission from the SEC for their own non-transparent ETF structures, which those companies could use for their own products as well as license to other investment businesses.

Read the full article on Financial Times FTfm