Prominent money manager Legg Mason plans to dip into the exchange traded fund market, testing the waters with a passively managed income-oriented ETF.
According to an SEC filing, the company outlined its initial plans for a Legg Mason Global Income ETF, which will try to reflect the performance of the Global Income Index.
The ETF will hold securities with both high and sustainable yields. The index provider will select securities based on dividend yield, amount of free cash flow, pay out ratios other dividend sustainability criteria and dividend payment history.
The underlying index will hold about 400 to 600 securities from the top 85% market capitalization of equities in the Global Developed Market Universe and will be rebalanced quarterly.
Joe Morris for Ignites notes that additional products in Legg Mason’s passively managed ETF suite could track global, international and domestic equities and fixed-income securities, along with a blend of international and domestic equities and fixed-income assets.
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Max Chen contributed to this article.
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