More New Active ETFs Ahead

June 09, 2020

BlackRock has filed with the Securities and Exchange Commission for exemptive relief that would allow it to launch actively managed ETFs that rely on Precidian’s ActiveShares model, which allows the ETFs to only disclose their holdings on a quarterly basis instead of daily. 

The Precidian model currently has three recently launched ETFs to its name from two different issuers, but it was the first to market by a few months. (Read: New Kind Of Active Debuts)

 

New Active Party Growing

And Fidelity launched a trio of ETFs last week that are actively managed but disclose their holdings on a monthly basis with a 30-day lag. There are three other models that have been approved by the SEC but that have not seen any ETFs using them launch. (Read: Fidelity Debuts 3 ETFs Via Own Active Model)

There are some interesting aspects to the BlackRock filling. For one, the iShares name is nowhere in sight in the filing, and the initial fund is called the BlackRock Future FinTech ETF. The iShares lineup is 370 ETFs strong, but includes fewer than 20 actively managed funds. Meanwhile, there is precisely one BlackRock-branded ETF trading in the U.S., the actively managed $106 million BlackRock U.S. Equity Factor Rotation ETF (DYNF).

Other Firms
So far, a number of other firms look to be planning to launch ETFs using the ActiveShares model including IndexIQ, Fred Alger Management, J.P. Morgan, Gabelli and Nationwide.

White label issuer Spinnaker, meanwhile, has filed for exemptive relief to launch its own actively managed ETFs, but has covered its bases by submitting forms for the models offered by the NYSE and Blue Tractor.

And Blue Tractor, originator of the “Shielded Alpha” model, has licensed its model to other firms and also filed a 40-APP for itself. The form names the initial fund as the Blue Tractor Large Cap Equity Fund. Most of the initial funds detailed in these filings are very basic core domestic exposures as the SEC is reluctant to permit something more complicated, such as an emerging market ETF.

It took roughly a decade for these kinds of active ETFs to come to market. The SEC has approved five different models in all, with Precidian and Fidelity having brought product to market already, and the NYSE, Blue Tractor and T. Rowe Price still waiting in the wings.

Contact Heather Bell at [email protected]

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