FMI Funds, the fund-issuing arm of Fiduciary Management, Inc., is the latest mutual fund manager to eye entry into the world of actively managed exchange traded funds.
Specifically, the firm is mulling introducing the FMI Large Cap Fund as a semitransparent ETF – a structure that doesn’t require active managers to disclose holdings on a daily basis.
In a filing with the Securities and Exchange Commission (SEC), FMI confirms interest in bringing the large-cap fund to market in semi-transparent ETF form.
“The Fund is an actively-managed, exchange-traded fund (ETF) that does not disclose portfolio holdings daily. In order to provide market participants with information on the Fund’s investments, the Fund will publish a ‘Proxy Portfolio’ on its website daily. A Proxy Portfolio is a basket of securities that is designed to closely track the daily performance of the Fund’s portfolio holdings,” according to the regulatory document.
The Investor Class of the fund debuted in 2001 and has a 15-year annualized return of 9.75%, according to FMI. A class of the fund for institutional investors launched in 2016.
“The Fund seeks to buy good businesses at value prices. Some characteristics of good businesses may include high recurring revenue and attractive returns on invested capital (ROIC). The Fund seeks companies with above average growth or improving profitability prospects,” notes FMI on the fund page. “The Fund has a strong orientation to low absolute and relative valuations, which are key to the execution of the investment strategy. The Fund holds approximately 20-30 stocks, with most major industry groups represented.”
FMI’s SEC filing doesn’t contain a launch date, ticker, or annual fee for the semi-transparent version of the large cap fund.
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.
