Best of Both Worlds: An Introduction to Semi-Transparent Active ETFs | ETF Trends

The launch of the first semi-transparent ETFs is one of the most anticipated financial innovations in decades. With the launch of American Century Investments new strategies, that anticipation is over.

In the upcoming webcast, Best of Both Worlds: An Introduction to Semi-Transparent Active ETFs, Edward Rosenberg, Head of Exchange Traded Funds, American Century Investments; Sandra Testani, Director of Product Management – Alternatives and ETFs, American Century Investments; and Matt Lewis, Vice President, Head of ETF Implementation and Capital Markets, American Century Investments, will outline this ETF revolution, and show how financial advisors can access active equity strategies from seasoned money managers in an ETF wrapper for the first time.

American Century Companies is now the first company to offer a suite of non-transparent ETFs, the Focused Dynamic Growth ETF (FDG) and Focused Large Cap Value ETF (FLV).

“Unlike traditional ETFs, the fund does not tell the public what assets it holds each day. Instead, the fund provides a verified intraday indicative value (VIIV), calculated and disseminated every second throughout the trading day by the Cboe BZX Exchange, Inc. (Listing Exchange) or by market data vendors or other information providers,” according to American Century.

The VIIV is based on the current market value of the securities in the fund’s portfolio on that day. The VIIV is intended to provide investors and other market participants with a highly correlated per share value of the underlying portfolio that can be compared to the current market price.

The semi-transparent nature should help American Century protect its management’s investment style from potential front-runners that would seek to undercut the more transparent nature of the ETF investment structure.

Through these semi-transparent or non-transparent ETF structures, money managers like American Century will feel more open to adapting traditional fund strategies into the more efficient ETF wrapper, potentially opening the start of a greater transformation in the fund industry as more active managers consider ETFs.

Financial advisors who are interested in learning more about semi-transparent actively managed ETFs can register for the Tuesday, April 21 webcast here.