Eaton Vance (NYSE: EV), the Boston-based mutual fund sponsor that last year won approval to market exchange traded managed funds (ETMFs), announced its first ETMF partner will be American Beacon Advisors.
ETMFs are a new concept that marry the liquidity and tax efficiencies that have attracted investors to ETFs with active investment strategies, while maintaining the confidentiality of current portfolio trading information. The new investment structure will trade on an exchange, and to achieve their non-transparent nature, the products will trade based on their net asset value, or utilize a so-called NAV-based trading.
Eaton Vance will be marketing NextShares as a low-cost and potentially better-performing and more tax-efficient option to traditional open-end, mutual funds. “NextShares can be expected to trade at prices that are consistently close to NAV in the absence of daily portfolio holdings disclosure,” according to Eaton Vance. [ETMFs Could Challenge Mutual Funds for Market Share]
Texas-based American Beacon issues an array of domestic, global and fixed income funds. The firm had $57.2 billion in assets under management at the end of the third quarter 2014, according to a statement. The firm also offers three index funds.
The Securities and Exchange Commission approved Eaton Vance’s new ETMF investment vehicle in November. The first suite of NextShares ETMFs is expected to come to market at around springtime. All but one of the 18 expected ETMF offerings will be an adaption of existing mutual fund strategies. [Eaton Vance Lands Approval for Non-Transparent ETF]