Daily ETF Watch: Nontransparent Filing Update

ETMF debut may be drawing near.

Reviewed by: Heather Bell
Edited by: Heather Bell

ETMF debut may be drawing near.

Eaton Vance for the third time has revised its exemptive relief filing with securities regulators that outlines plans to launch what it terms “exchange traded managed funds,” or ETMFs. The funds would be actively managed and nontransparent, meaning they wouldn’t reveal their holdings on a daily basis.

The core concepts appear to remain the same in the latest filing, with most of the changes amounting to a tightening up and tweaking of the language.

In early August, Eaton Vance made an initial filing for 18 different ETMFs despite the fact that it had not yet received Securities and Exchange approval for the ETMF concept. The revision to Eaton Vance’s “40-APP” filing likely brings those 18 funds a step closer to actually launching.

Nontransparent ETFs have been an unfulfilled dream in the ETF world for some time, and several firms have filed exemptive relief requests. However, almost all of those 40-APP filings are based on a patented methodology developed by Precidian Investments, which has also filed for its own nontransparent actively managed ETFs. The motive is to create an edge by keeping portfolio holdings private for at least three months, as is the case with actively managed open-end mutual funds.

The Capital Group, State Street, BlackRock and Invesco PowerShares are among the firms that have licensed Precidian’s patented ETF structure. However, none has been approved for launch yet.

Boston-based Eaton Vance, for the ETMF concept, purchased patents developed by Gary Gastineau, a long-respected figure in the ETF industry. The funds will be priced based on NAV-based trading.


Heather Bell is a former managing editor of etf.com. She has also held editorial positions at Dow Jones Indexes and Lehman Brothers. Bell is a graduate of Dartmouth college and resides in the Denver area with her two dogs.