PIMCO’s Intermediate Municipal Bond Strategy Fund (MUNI) was launched by PIMCO ETFs in Nov, 2009 as the first actively-managed ETF to focus on the $2.7 trillion municipal bond market which was then followed up by a launch from Grail Advisors called the Grail McDonnell Intermediate Municipal Bond Fund (GMMB). MUNI is managed by EVP and municipal bond desk head, John Cummings, who also manages the shorter maturity SMMU provided by PIMCO.
Archive for June, 2010
Reported by Bloomberg, BlackRock iShares – by far the largest issuer of ETFs in the world – is now seeking approval from the SEC for actively-managed ETFs “that would keep some of their assets undisclosed”. If such a modification to the Active ETF structure gets approved by the SEC, many issuers and managers would be much more comfortable in bringing strong active managers to the Active ETF space without fear for their strategies being front-run.
If one was to look at the break up of all assets managed, it makes for interesting discussion to ask which piece of pie the relatively new actively-managed ETF sector will be targeting. With the entrance of actively-managed ETFs on the scene, that ability to provide active management is no longer unique to mutual funds. And that’s why Active ETFs will be aiming to take a chunk of the market share currently held by actively-managed mutual funds.
On June 23rd, Grail Advisors filed a preliminary prospectus with the SEC for a new actively-managed ETF called the Grail DoubleLine Emerging Markets Fixed Income ETF which will be listed on the NYSE once approved and brought to market. The fund will be sub-advised by DoubleLine Capital LP’s portfolio manager, Luz M. Padilla, who will be responsible to the day-to-day investment decisions for the portfolio.
AdvisorShares announced on June 23rd that it will be partnering with Cambria Investment Management, a Los Angeles based investment manager, to develop a new actively-managed ETF that will follow a global tactical asset allocation strategy. AdvisorShares now has publically announced plans to work with or is already working with 6 different asset managers. AdvisorShares has yet to file for this particular strategy with the SEC.
The prospect of converting existing mutual funds into actively-managed ETFs was first brought up for discussion by Bill Thomas, CEO of Grail Advisors, who in an interview with ActiveETFs | InFocus provided more insight on the value proposition behind the conversion of a mutual fund into an ETF structure. However, not much was heard on the topic since then until the filing by Huntington Asset Advisors on June 17th to launch two new Active ETFs.
The Active AlphaQ Fund (PQY) is PowerShares’ largest actively-managed ETF with about $21 million in assets at the end of May 2010. The AlphaQ fund has been one of the few Active ETFs provided by PowerShares that has gained some sort of traction with investors. It was the part of the group of 4 Active ETFs that were launched together by PowerShares in Feb 2008 and now represent the oldest actively-managed ETFs in the US.
The filing by iShares to launch both equity and fixed-income actively-managed ETFs could just be seen as yet another player tossing their hat in the ring. But there’s a few reasons why this step could be much more than that for the Active ETF space. With this filing, iShares has indeed announced its intentions and the writing on the wall is becoming clearer by the day.
