The Hartford Lines Up To Offer ETFs

By Staff
September 23, 2010

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joins a lengthening line of storied firms laying groundwork to join the ETF juggernaut.

The Hartford, the Connecticut-based financial services firm known for its insurance products, filed paperwork with the Securities and Exchange Commission seeking permission to offer actively managed ETFs, the first one focused on both U.S. and non-U.S. investment-grade debt.

joins a growing list of reputable firms, such as Janus, Legg Mason, Dreyfus and Alliance Bernstein, that have built their reputations on actively managed mutual funds and are now laying the regulatory groundwork to expand into ETFs. The first exchange-traded fund, the SPDR S&P (NYSEArca: SPY) was launched in 1993, and total assets in the industry are now around $800 billion, with more growth widely considered a given in coming years.

’s so-called exemptive relief filing casts a wide net, outlining possible plans for debt and equity funds that could own securities from all over the world, and also opens the possibility of issuing fund-of-funds ETFs, which are securities created from several individual ETFs.

The Hartford, Conn.-based company said in the filing that its first fund’s investment objective is to seek total return. The ETF may own debt of any maturity, denominated both in dollars and foreign currencies and coming from developed as well as emerging markets.

No Derivatives

The filing said none of the funds Hartford may launch once it gains “exemptive relief” will invest in swaps, options or futures—a decision that's likely to move the approval process along relatively quickly given the SEC’s decision in March to review actively managed funds and those that include derivatives in their investment strategies.

Exemptive relief grants ETF firms exception to sections of the Investment Act of 1940 and are just the first step in the path to launching ETFs. It often takes at least six to 12 months from the date of the initial filing for a company’s first ETF to hit the market.


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