FYI: Nontransparent actively managed ETFs have been the holy grail for the ETF industry for the better part of a decade. Eaton Vance launched its “NextShares” exchange-traded managed funds (ETMFs) years ago, but it has not accumulated much in the way of assets, and aren’t classified as actual ETFs.
This past month, however, Precidian received the SEC’s blessing on its in-house model, which implements a blind trust. While an ActiveShares portfolio is not transparent to investors, each fund will publish a verified intraday indicative value every second. Currently, regular ETFs quote net asset values to the marketplace every 15 seconds. The ActiveShares funds will have authorized participant (AP) representative—known as trusted agents—that would be provided data on portfolio holdings and use confidential accounts to do the creations and redemptions for the APs, according to Precidian.
For perspective, competing nontransparent active models from firms like Natixis rely on proxy portfolios that do not actually represent the total portfolio. Here, Precidian CEO Dan McCabe explains what sets his firm’s model apart.
Regards,
Ted
https://www.etf.com/sections/features-and-news/nontransparent-active-etfs-explained
