Invesco, already one of the largest issuers of both passive exchange traded funds and actively managed mutual funds, is looking to bring its dominance to a new ETF structure that marries the best of active and passive management.
The fund giant is nearing launch of new active funds that don’t require daily disclosure, but trade comparably to traditional passive ETFs.
With more traditional mutual funds eyeing the ETF space but remaining reluctant to give up their secret sauce under the transparency of the ETF investment vehicle, many are looking into non-daily disclosure exchange traded products as a way to combine the best of two worlds.
Invesco ETFs: The Best of Both Worlds?
Earlier this week, Atlanta-based Invesco “announced that it has reached the final regulatory stage in it its effort to build its own active non-transparent ETF model. The U.S. Securities and Exchange Commission (SEC) has published a notice regarding Invesco’s exemptive application, indicating its plan to grant the needed relief subject to any comments it receives,” according to a statement.
With its expertise and dominant perches in both the actively managed mutual funds and passively managed exchange traded funds arenas, Invesco makes for a logical entrant into a new world of ETFs.
The new model being pitched by Invesco “will retain a number of the characteristics that investors find attractive in an ETF structure, including an effective arbitrage mechanism, tax efficiency and intraday tradability. Under the proposed model, each trading day Invesco will publish key data metrics to offer a clear view into an ETF’s portfolio value without fully disclosing the ETF holdings,” according to the issuer.
Several months ago, Invesco filed for an exemptive order to license Fidelity’s active equity ETF methodology. It was granted approval for the request last month.
When approved for the non-disclosure funds, Invesco will use both Fidelity and in-house methodologies for the products.
For more on active strategies, visit our Active ETFs Channel.
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.
