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Nuveen Inches Closer to ETF Return

Fifteen years after departing the exchange traded funds industry, Nuveen Investments is on track to return after the Securities and Exchange Commission granted the Chicago-based firm permission to sell ETFs.

Earlier this week, the SEC said it is likely to approve plans by Nuveen for some actively managed ETFs. An order granting the application will be issued unless the Commission orders a hearing, according to the SEC.

Nuveen “first asked for permission to offer index-based ETFs in 2000, at the time developing proposals for what could have been the very first bond ETFs. Those products now enjoy tremendous popularity — ETFs are a $3 trillion market globally,” reports Trevor Hunnicutt for InvestmentNews, which broke the story on the SEC potentially clearing the way of Nuveen’s ETF return.

What has gone relatively unnoticed is that Nuveen has been other steps to get back into the ETF game. Last month, the firm said shareholders of the Nuveen Long/Short Commodity Total Return Fund (CTF) , have approved the plan to convert the fund into open-ended exchange-traded fund (ETF). The conversion plan is also contingent on customary regulatory approvals, according to a statement.

“The Annual Meeting of Shareholders for the Nuveen Diversified Commodity Fund (CFD) has been adjourned to June 15, 2015, to allow additional solicitation of votes on the proposed plan to convert the fund into an ETF,” according to Nuveen.

Nuveen said in December it was planning to convert CTF and CFD into ETFs. CFD invests in an array of commodity futures and forward contracts. As of the end of November, the mutual fund allocated a combined 26.5% of its weight to oil and gold, according to issuer data. The fund’s annual expenses total 1.75%.

CTF holds a “portfolio of exchange-traded commodity futures contracts that are among the most actively traded futures contracts in global commodity markets,” according to Nuveen. CTF charges 1.61% per year. [Nuveen to Convert two Mutual Funds Into ETFs]

Nuveen has not been completely absent from the ETF business over the past 13 years. The firm partners with State Street’s (STT) State Street Global Advisors unit on at least seven fixed income ETFs, including the SPDR Nuveen S&P High Yield Municipal Bond ETF (HYMB), SPDR Nuveen Barclays Build America Bond ETF (BABS) and the SPDR Nuveen Barclays Municipal Bond ETF (TFI).

“ Nuveen’s proposal said its initial funds would be actively managed investment strategies targeting large caps, the biggest publicly traded companies,” according to InvestmentNews.

ETF Trends editorial team contributed to this post.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.