Capital Group, the parent company of American Funds, is preparing to enter the semitransparent exchange traded funds arena.
The California-based fund giant said earlier this year it’s aiming to launch both equity and fixed income funds under the semitransparent structure early in 2022.
“Capital Group, home of American Funds and one of the world’s largest investment management firms, has filed an application for exemptive relief with the Securities and Exchange Commission based on Fidelity’s active equity ETF methodology,” according to a statement issued last Friday.
The fund will be based on Fidelity’s active ETF methodology.
As ETF Trends previously reported: “Unlike other actively managed ETFs, Fidelity’s active non-transparent ETF publishes each business day on its website a ‘Tracking Basket,’ which is designed to closely track the daily performance of the fund but is not the fund’s actual portfolio. Fidelity has argued that this daily published tracking basket provides enough information to facilitate market maker participation and hedging of intra-day arbitrage among market makers or Authorized Participants.”
The structure “provides information to market participants to promote efficient trading of shares, and preserves the ability to add value through active management.”
Holly Framsted, previously head of domestic factor ETFs at BlackRock’s ETF and Index Investments Group, is leading Capital Group’s active ETF business.
“”ETFs will be an important extension to our current suite of investment solutions,” she said in the statement. “Fidelity’s innovative structure is one of the solutions we’ll consider as we plan for a robust ETF launch in early 2022.”
At the end of last year, Capital Group had $2.3 trillion in global assets under management.
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