Legg Mason Inc. has moved closer toward the exchange traded fund arena, filing with the Securities and Exchange Commission to build index-based stock and bond ETFs.
According to a recent SEC filing, Legg Mason is applying for an exemptive relief to create ETFs that reflect the performance of an underlying index.
“The Initial Fund will be an Equity Fund whose performance will correspond generally to the performance of a securities index developed by a third party (the ‘Initial Underlying Index’),” according to the filing. “Each Fund will seek to provide investment returns that correspond, before fees and expenses, generally to the performance of a specified equity and/or a specified fixed income securities index (each an ‘Underlying Index’ and collectively, ‘Underlying Indexes’).”
The money manager stated that the recent filing is “the next step in building the organizational structure to offer a suite of passively and actively managed ETFs,” reports Trevor Hunnicutt for InvestmentNews.
The company also mentioned that the index-based ETFs are going to be “better beta,” which suggests that offerings could be smart-beta ETFs.
The move into passive index-based ETFs comes as no surprise after the firm snagged two seasoned ETF experts from Vanguard earlier this year. Legg hired Rick Genoni and Brandon Clark to lead its ETF strategy back in February.