“We totally embrace those constraints. The concept of full transparency is something we’re very, very comfortable with,” Schaja says.
The managers for each fund will have discretion on a daily basis to choose securities for the ETF’s portfolio that are consistent with the fund’s investment objective. All holdings in the fund will be disclosed daily.
Thomas acknowledges recent reports that actively managed ETFs have been slow to gain assets, but he sees a lot of potential for that to change as investors learn more about active ETFs and assets trickle back into the markets.
“What we’ve learned is that advisors and investors definitely get it when you explain. They understand the benefits and that gets them interested,” Thomas points out.
Couple that with a large pool of money sitting on the sidelines waiting to be redeployed, and it could lead to a flood of interest in actively managed ETFs.
Each of the funds will have an expense ratio of 0.89%, which is less than expense ratio of the average mutual fund.
Grail also plans to follow up its first offering this summer with the Grail American Beacon International Equity, which is the first international ETF of its kind.
Grail says their new funds are the latest in what’s expected to be a series of offerings from them. From here, Thomas says, Grail is going to assess the market’s needs as they move forward with more funds.