On August 31st, Grail Advisors filed a detailed prospectus with the SEC pertaining to a new actively-managed ETF called the Grail Western Asset Ultra Short Duration ETF, which will have the ticker GWLQ. Grail first filed for this product back in May and back then it planned to call the fund the “Grail Western Asset Enhanced Liquidity ETF”. The detailed prospectus now includes more information such as the expense structure for the fund.
Issuers
PIMCO’s Short Term Municipal Bond Fund (SMMU) was launched in late January, 2010 and has since managed to accumulate approximately $18 million in assets, as of the end of July. SMMU is one of 3 actively-managed ETFs that PIMCO has brought to the market. The fund is managed by John Cummings, who is an Executive Vice President and also the head of the municipal bond desk at PIMCO.
When expectations are missed by such a margin, everyone starts questioning their assumptions. On Aug 24th, US existing home sales plunged by 27%. Where consensus expectations were for the number to be around 4.72 million, which in itself was a decrease from the previous number of 5.26 million, the actual home sales in July came out at 3.83 million, the lowest number in 15 years.
When looking at actively-managed ETFs specifically, there have been claims made that Active ETFs will tend to have larger premium/discounts to NAV because of greater turnover in the fund and lower interest from market makers and designated brokers etc. We decided to look at exactly how Active ETFs in the US have fared in terms of keeping their ETF prices close to NAV.
The Active ETF space in the US is now starting to see some of the attrition that had long been expected to occur in this relatively new space. On August 20th, Grail Advisors announced in a press release that they will be shutting down two of their actively-managed ETFs – the RP Technology ETF (RPQ) and the RP Financials ETF (RFF). The closure of the funds was approved at a board meeting and the funds will be suspended prior to market open on Aug 30, 2010.
AADR is an actively-managed ETF that looks to achieve long-term capital appreciation above international equity benchmarks. The fund will invest in non-US companies that trade on US exchanges through American Depositary Receipts (ADRs).
In the 2 years that actively-managed ETFs have been around, there have been funds launched that focus on various asset classes, ranging from equities and fixed-income to currencies and commodities. While equity focused actively-managed ETFs are the most numerous in number, they certainly haven’t seen as much success as funds focused on other asset classes.
U.S. One filed with the SEC on Aug 18th, to expand the exemptive relief for its ETF family that will allow them to offer ETFs that invest in individual US and foreign listed securities, if approved. The firm’s existing relief only allows it to invest in other US listed ETFs. This essentially means that U.S. One can now offer actively-managed ETFs that can pick and choose individual stocks and bonds to invest in, instead of having a strict fund-of-funds structure like its existing Active ETF – One Fund
