To circumvent that, a growing number of mutual fund companies have filed with the Securities and Exchange Commission seeking approval for non-transparent active ETFs that wouldn’t report their holdings on a daily basis. Among them are Eaton Vance and its exchange-traded managed funds (ETMFs) structure that would employ net asset value-based trading designed to facilitate trading without the need for portfolio transparency.
In addition, a passel of leading ETF providers including BlackRock, State Street Global Advisors and Invesco PowerShares, along with mutual fund stalwart Capital Group’s American Funds, have filed for SEC approval for non-transparent, actively managed ETFs using a patented strategy developed by Precidian Investments that employs a blind-trust structure.
Precidian, based in Bedminster, N.J., also has filed with the SEC to launch its own active ETFs. None of the above-mentioned applications have been approved yet.
Fidelity joined the party last month when it filed with the SEC seeking approval for non-transparent actively managed ETFs that would publish a daily tracking basket designed to closely track the performance of a particular fund. It wouldn’t be an exact match of a fund’s daily holdings. Rather, a portfolio’s holdings would be reported monthly.