Daily ETF Watch: ETMFs Gain Key Support

Envestnet announced on Tuesday that it would offer the NextShares exchange-traded managed funds (ETMFs) available through its wealth management platform and fund strategist portfolios, both of which target advisors.

The move is significant for the nascent NextShares, which could launch as early as this year. Perhaps the biggest concern about the funds is whether there will be infrastructure in place to support them.

Envestnet’s participation changes that equation, as its open-architecture platforms are used by more than 41,000 advisors and 3 million investor accounts, supporting a total of $700 billion in client assets.

The NextShares are a framework created by Eaton Vance, based on a patented methodology developed by longtime ETF industry figure Gary Gastineau. The funds will rely on an NAV-based trading approach that will allow them to create nontransparent actively managed portfolios, a concept that has been both elusive and controversial in the exchange-traded fund space.

Eaton Vance has licensed the NextShares structure to a dozen or so firms, with intentions to launch the initial products in a concerted wave.

It was not clear from the press release when Envestnet would be ready to support the funds.

Pimco To Close 3 Funds
A recent filing from PIMCO indicates the firm plans to shut down three of its ETFs. The last day of trading for the funds is Sept. 23, with liquidation slated for Sept. 30.

The funds are as follows:

• Pimco 3-7 Year U.S. Treasury ETF (FIVZ | C-72), launched in 2009
• Pimco 7-15 Year U.S. Treasury ETF (TENZ | C-50), launched in 2009
• Pimco Foreign Currency Strategy ETF (FORX | D-30), launched in 2013

FORX, the only actively managed fund in the trio, has less than $15 million in assets under management, while TENZ has roughly $25 million and FIVZ has less than $10 million.

So far, more than 170 fund closures have been announced this year, and it looks like by year’s end, 2015 could outpace the 190 closures in 2014.

Contact Heather Bell at [email protected].