“I am not persuaded by the record before me today that the application provides an adequate substitute for the transparency that has been the hallmark of our ETF regime for decades,” he said. “If the application is ultimately approved, however, I urge the staff to keep a close eye on this.”
Issuer Appeal
Other issuers, including BlackRock Inc. and JPMorgan Chase & Co., have already licensed the structure, according to a statement from Precidian. But while asset managers seem interested, some analysts are skeptical about the appeal to investors.
There are already about 270 active ETFs that do reveal their holdings. And Eaton Vance Corp. has so far failed to lure assets to a clutch of non-transparent funds it started in 2016 using a different structure.
“Transparency I would say is in the top five most beloved traits of ETFs -- this challenges it,” said Eric Balchunas, an ETF analyst at Bloomberg Intelligence. “These are probably going to have a hard time.”
This article was provided by Bloomberg News.