Daily ETF Watch: Gabelli Plans ETMFs

April 01, 2015

A recent filing from Gamco Investors' Gabelli Funds arm outlines the mutual fund provider’s intention to expand into the exchange-traded products space; however, that will not occur via a traditional ETF structure.

 

The financial services giant has licensed Eaton Vance’s patent on the “exchange-traded managed fund,” (ETMF) structure for its own use. The funds will trade during the day but will rely on a NAV-based pricing system at settlement, rather than the real-time, intraday pricing that prevails on ETFs.

 

So far, no funds have launched under the Eaton Vance structure, but the structure has received approval from U.S. regulators. In contrast, a competing nontransparent active ETF structure developed by Precidian Investments is still at the drawing board.

 

7 Gabelli ETMFs Detailed

The 40-APP filing from Gabelli Funds covers seven initial funds, though it should be noted the document is an exemptive relief request rather than a registration statement that marks a tangible move to get an actual strategy approved.

 

At least three of the proposed funds seem to be replications of existing Gamco mutual funds—a pattern that prevails among those parties that have licensed the ETMF structure.

 

The Gabelli Small Cap Growth ETMF, Gabelli Equity Income ETMF and Gabelli SRI ETMF appear to correspond with the Gabelli Small-Cap Growth Fund (GABSX), Gabelli Equity Income Fund (GABEX) and Gabelli SRI Fund (SRIGX).

 

Indeed, part of the appeal of nontransparent exchange-traded products for devoted active shops is the fact that their “secret sauces” will not be publicly revealed. There is speculation that the rise of nontransparent active exchange-traded products could induce a flood of traditional active managers to enter the space.

 

However, the remaining four ETMFs in the Gabelli filing look to be new strategies:

  • Gabelli Small Cap Value ETMF
  • Gabelli Small and Mid Cap Value ETMF
  • Gabelli Global Small and Mid Cap Value ETMF
  • Gabelli Malone Wealth Tracker ETMF

 

It is not clear when Gabelli is likely to file registration statements on any of the funds.

 

 

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