“We are looking at ETFs, but our concern remains the whole issue of transparency,” Freadhoff said in the article. “An ETF where an investor can see through to the underlying holdings, we feel, would be detrimental to our existing shareholders.”
Nevertheless, some money managers have proposed alternative active ETF structures to help issuers protect their secret sauce. T. Rowe Price, BlackRock, State Street Global Advisors, Eaton Vance and Vanguard have offered new proposals to the SEC. [Non-Transparent Active ETFs are not a Slam-Dunk]
ETF market observers also point out that mutual fund providers could begin to create ETF clones of popular fund strategies, like the PIMCO Total Return ETF (NYSEArca: BOND), in an attempt to break into the ETF market.
There are currently 67 actively managed U.S.-listed ETFs on the market, with $14.7 billion in assets under management, according to XTF data.
For more information on active ETFs, visit our actively managed ETFs category.
Max Chen contributed to this article.