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This was originally discussed by David in his June 2020 "Mice That Roared" commentary:[The conversion] ... may still blaze a path forward for any mutual fund company to decide to convert an active, non-fully transparent mutual fund into an active, non-fully transparent ETF.
If such a mutual-fund-to-ETF could be offered with a reasonable bid/ask spread and 20+ basis points in a lower annual expense ratio, the appeal to do so may prove irresistible. Not so much because the fund manager will automatically assume that the new wrapper will make it easier to raise new assets; rather, because using the new wrapper may help protect the fund manager from losing existing assets to ETFs and other products. In baseball terminology, this is a defensive switch, not an offensive switch.