The ETMF may hold up to 25% of its total assets in foreign Senior Loans denominated in U.S. dollars, euros, British pounds, Swiss francs, Canadian dollars, or Australian dollars. The fund may also invest in secured and unsecured subordinated loans, second lien loans and subordinated bridge loans or so-called junior loans, other floating rate debt securities, fixed-income debt obligations and money market instruments.
The other floating rate debt securities, fixed-income debt securities and money market instruments may include bonds, notes and debentures issued by corporations; debt securities issued or guaranteed by the U.S. government or one if its agencies or instrumentalities; and commercial paper.
ETMFs are not exchange traded funds. Eaton Vance has a launched a number of products under its NextShares brand, covering a relatively new structured product called exchange traded managed funds, or ETMFs, a hybrid of what some consider the best parts of actively managed mutual funds with an exchange traded fund-esque structure.
ETMFs are a new concept that marry the liquidity and tax efficiencies that have attracted investors to ETFs with active investment strategies, while maintaining the confidentiality of current portfolio trading information to protect a manager’s “secret sauce.” Unlike traditional ETFs, ETMFs will not disclose holdings on a daily basis. The patented methodology allows the funds to trade just once per day at the close of business, but investors can still buy and sell ETMFs in real time during normal hours. Consequently, investors who enter a trade during the day will pay a slight premium to net asset value to acquire shares or receive slightly less than NAV to sell.
For more information on exchange traded managed funds, visit our ETMFs category.