Investment management firm American Century Companies could roll out its own suite of actively managed, semi-transparent ETFs after coming to an agreement with Precidian Investments to license the firm’s ActiveShares methodology.
Precedian’s patented ActiveShares fund structure would allow American Century to bypass its own regulatory exemptive relief process to launch its time-tested actively managed investment strategies through the ETF investment vehicle without the daily holdings disclosure requirements of fully transparent ETFs, according to a press release.
The ActiveShares structure is still going through the regulatory process and has yet to receive exemptive relief from the Securities and Exchange Commission.
ETFs are known for their transparent nature, which helps facilitate its innate creation and redemption process and provides an efficient trading tool. However, a number of would-be active ETF managers are loath to reveal their secret sauce under the fully transparent nature of the ETF structure, so more are seeking alternative investment wrappers that would provide the same efficiency as ETFs but without the full transparency.