The first NextShares exchange traded managed fund, or ETMF, was launched Friday, February 26, and to celebrate the milestone, Eaton Vance Corp. rang the Opening Bell this morning on the Nasdaq Stock Market.
Tom Lydon, publisher of ETF Trends, met with Charles Gaffney, V.P. of Eaton Vance Management, at the Opening Bell to gauge the atmosphere around the new entrant into the financial markets.
The Eaton Vance Stock NextShares (NasdaqGM EVSTC) was created around a patented trading methodology designed to act like a nontransparent actively managed ETF. EVSTC has a 0.65% expense ratio.
EVSTC will leverage the skill, experience and knowledge of Eaton Vance’s equity research organization, with Gaffney overseeing the investment process. The management team will select companies with consistent earnings growth and leading business franchises that Eaton Vance believes will offer more consistency of returns over the long-term.
The new line of active ETMFs will trade on an exchange at prices linked to the fund’s next-determined daily net asset value, or NAV, through a so-called NAV-based trading mechanism. However, it is important to note that ETMFs are not ETFs.
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 to protect a manager’s “secret sauce.”