Firm files with the regulators for its own proprietary non-transparent active model
ATLANTA, Sept. 25, 2019 /PRNewswire/ -- Invesco Ltd. (IVZ) a leading global provider of exchange-traded funds (ETFs), announced today that it has filed an application with the U.S. Securities and Exchange Commission (SEC) requesting exemptive relief to build its own non-transparent active ETF model.
"Invesco is excited to have filed with regulators for our own innovative and proprietary non-transparent exchanged-traded fund (ETF) model," explains Dan Draper, Managing Director and Global Head of Invesco ETFs. "We believe that the structure of our model will provide investors with the ability to maximize the benefits of active management through a tax-efficient1 and liquid2 ETF wrapper."
The proposed Invesco non-transparent ETF model will retain a number of the characteristics that investors find attractive in an ETF wrapper, including an effective arbitrage mechanism, tax efficiency1 and intraday tradability. During market hours, Invesco's proposed model will offer a clear view into an ETF's portfolio value at regular intervals. If approved, the Invesco non-transparent model would maintain confidentiality of a fund's strategy and help mitigate the risk of front-running by keeping a portion of the fund's holdings confidential to the market. The Invesco affiliated broker-dealer would assist authorized participants delivering or receiving an in-kind basket of securities while executing trades to realign the creation and redemption basket to the Fund holdings. If approved, the Invesco non-transparent active ETFs will strike at least two NAVs per day, thus providing multiple creation and redemption windows to authorized participants throughout the day.
Daily transparency of an investment manager's portfolio selections has created concern that it would enable traders to "front-run" an ETF's portfolio transactions. As a result, the historical condition of daily portfolio transparency has limited the strategies available to the market through active ETFs.
"One of the key priorities of Invesco ETFs is offering investors a variety of choice. We believe that our model has the potential to increase the number and range of active ETFs available to investors, which may have been limited in the past by concerns of front-running," continues Draper. "By introducing a possible solution to non-transparent active ETFs, Invesco believes that there may be a way for both passive fully transparent ETFs and active non-transparent ETFs to be valuable tools in an investor portfolio."
About Invesco Ltd.
Invesco is a global independent investment management firm dedicated to delivering an investment experience that helps people get more out of life. Our 13 distinctive investment teams deliver a comprehensive range of active, passive and alternative investment capabilities. With offices in 25 countries, Invesco managed $1.1 trillion in assets on behalf of clients worldwide as of August 31, 2019. For more information, visit www.invesco.com.
Risks and other Important Information
1 Invesco does not offer tax advice. Please consult your tax adviser for information regarding your own personal tax situation.
2 Shares are not individually redeemable and owners of the Shares may acquire those Shares from the Fund and tender those Shares for redemption to the Fund in Creation Unit aggregations only, typically consisting of 10,000, 50,000, 75,000, 80,000, 100,000, 150,000 or 200,000 Shares.
Not FDIC insured | May Lose Value | No Bank Guarantee
This does not constitute a recommendation of any investment strategy or product for a particular investor. Investors should consult a financial professional before making any investment decisions.
There are risks involved with investing in ETFs, including possible loss of money. Index-based ETFs are not actively managed. Actively managed ETFs do not necessarily seek to replicate the performance of a specified index. Both index-based and actively managed ETFs are subject to risks similar to stocks, including those related to short selling and margin maintenance. Ordinary brokerage commissions apply.
Before investing, investors should carefully read the prospectus/summary prospectus and carefully consider the investment objectives, risks, charges and expenses. For this and more complete information about the Fund call 800 983 0903 or visit invesco.com for the prospectus/summary prospectus.
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