Eaton Vance Files To Enter ETF Market

March 08, 2010

Eaton Vance, a Boston-based firm known for its lineup of closed-end funds, filed with the Securities and Exchange Commission to lay the groundwork to launch five actively managed ETFs focusing on investment-grade
U.S. debt, making it the latest player to try to enter the fast-growing industry.

The proposed funds are the Eaton Vance Enhanced Short Maturity ETF, the Eaton Vance Government Limited Maturity ETF, the Eaton Vance Intermediate Municipal Bond ETF, the Eaton Vance Prime Limited Maturity ETF and the Eaton Vance Short Term Municipal Bond ETF. The filing on March 5 didn’t name trading symbols for the funds or their annual management fees. All will invest in dollar-denominated securities.

Baltimore-based Legg Mason made a similar filing two weeks ago seeking “exemptive relief” to launch a family of actively managed ETFs that would include domestic and/or global equities or debt. Assets in the entire U.S. ETF industry totaled $755.85 billion at the end of last month, compared with $456.31 billion a year earlier, according to data compiled by the National Stock Exchange.

Most active ETFs have yet to show sizable asset inflows. Still, Legg Mason and other companies such as T. Rowe Price, Pimco, Goldman Sachs and Charles Schwab are entering or thinking about entering the actively managed ETF space. There are plenty of arguments why active ETFs have not caught on with investors, as you can read in Matt Hougan’s recent blog about the trend.

Exemptive-relief filings grant exemptions to parts of the Investment Act of 1940, and represent the first hurdle fund companies must clear to issue ETFs.


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