American Century Investments has filed for exemptive relief for actively managed, semi-transparent ETFs that will utilize Precidian Investments’ ActiveShares® methodology.
It comes after the SEC on Monday signed off on an order that would allow Precidian Investments to proceed with offering an actively managed ETF that wouldn’t be required to disclose its full portfolio to the market on a daily basis, reports Pensions & Investments.
Precidian’s ActiveShares functions in a similar fashion to existing ETFs by quoting a consistent intraday price to the market (called a “VIIV” or verified intra-day indicative value). While all other ETFs publish an IIV/IOPV every 15 seconds, ActiveShares will take it a step further and publish the VIIV every second.
Related: ETF Industry Game Changer: SEC Gives Nod To Non-Transparent ETFs
In a release issued Tuesday, the new structure will allow American Century to deliver its time-tested actively-managed investment strategies in these ETF vehicles without the daily holdings disclosure requirement of fully transparent ETFs.
“We’re pleased that we’ll be able to offer our clients another way to access our time-tested investment expertise with the tax advantages inherent in ETFs,” said Edward Rosenberg, senior vice president and head of ETFs for American Century.
American Century joined JP Morgan Asset Management, BlackRock, Capital Research, Legg Mason, ClearBridge, Royce and Nationwide in licensing Precidian’s intellectual property. Precidian’s ActiveShares® structure seeks to combine the most beneficial aspects of the traditional mutual fund with the efficiencies and flexibilities of an ETF. Precidian’s patented ETF structure seeks to provide asset managers with the ability to generate excess return without daily disclosure of their proprietary strategies while simultaneously creating significant improvements in tax efficiency, manager flexibility and lower operating costs.
The funds will be incorporated into American Century’s suite of ETFs. Other offerings include American Century Diversified Corporate Bond ETF (KORP), American Century Quality Diversified International ETF (QINT), American Century STOXX® U.S. Quality Growth ETF (QGRO), American Century STOXX® U.S. Quality Value ETF (VALQ) and American Century Diversified Municipal Bond ETF (TAXF). STOXX is a registered trademark of STOXX Ltd. All of the firm’s ETFs feature institutional-quality management that draws on the American Century’s fundamental and quantitative expertise.
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