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Active ETFs in Focus Following Eaton Vance's ETMF Approval

Eric Dutram

One of the biggest stories of the last few weeks in the ETF world was easily the approval of a new product structure that could bring a new age to the exchange-traded product space. The new approach looks to implement non-transparent holdings, allowing managers to keep their positions secret, save for a quarterly reveal.

This is in stark contrast to the current ETF approach which calls for daily disclosure of holdings. Additionally, it is worth noting that these new products will use NAV trading, and will only buy securities at the end of the day, though investors can lock prices in during any point of the session.

This news has already sent shares of Eaton Vance (EV), the company that received the approval, sky high in recent trading. After all, it could cause many mutual fund managers to switch to this structure bring a whole new crop of active funds to the market.

However, it is worth noting that there are a few brave managers in the ETF world that have been willing to implement active strategies, even with this daily disclosure requirement. These include the following funds, though there are dozens that have braved the active ETF waters:

  • FTGC – Commodities can be tough so an active approach may be warranted here. FTGC is a way to play commodities with an active strategy, as the fund holds a varying amount of commodities depending on a variety of factors.
  • HYLD – This fund zeroes in on the high yield bond market, holding corporate securities that have high yields, giving HYLD a yield approaching 10%.
  • WBIL – A truly rare fund, this product has an equity approach to active investing, though it can hold some short-term bonds as well.

 
For more on these products and the new ‘ETMF’ structure from Eaton Vance, make sure to watch our short video below:



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