In an attempt to prevent front running in actively managed exchange traded fund strategies, State Street Global Advisors filed with the Securities and Exchange Commission to launch active funds under a “blind trust.”
According to a filing, SSgA is planning three active ETFs under the new blind trust format: the SPDR SSgA Equity ETF, SPDR SSgA Emerging Markets ETF and SPDR SSgA Aggregate Bond ETF. [Growing Interest for Actively Managed ETFs: SEI Report]
“This operating procedure is being proposed because it will allow the funds to use proprietary investment strategies and techniques which the advisor has developed whose value to the advisor and shareholders would be compromised if the funds’ portfolio holdings were disclosed on a daily basis,” according to the filing, Ignites reports.
The equity ETF will include assets from the Russell 3000. The emerging markets ETF will include companies based in or substantially involved in the emerging markets. The aggregate bond ETF will invest in debt instruments, with the majority of assets drawn from the Barclays Capital U.S. Aggregate Bond Index.