First ActiveShares Closer To Launch

Cboe Global Markets, the parent company of ETF.com, has received approval on its final key filing to launch American Century’s proposed actively managed ETFs, the first of  its kind to disclose holdings less frquently than what is currently available in active ETfs. 

The two affected funds are another step closer to launching; the “19b4” SEC filling is the last approval that the exchange needs before launching this new ETF structure, but additional filings by the issuer may follow.

The two American Century ETFs will rely on Precidian’s ActiveShares model, which uses an authorized participant representative to maintain confidentiality. They will disclose holdings on a quarterly schedule, like all other 1940 Act funds. However, other Precidian licensees could choose to disclose holdings more frequently if that is their preference.  

The American Century Focused Dynamic Growth ETF (FDG) and American Century Focused Large Cap Value ETF (FLV) will both list on Cboe Global Markets when they do launch. FDG comes with an expense ratio of 0.45%, while FLV has an expense ratio of 0.42%.

FDG will use fundamental analysis of individual securities to select roughly 30 to 45 large-cap companies experiencing accelerated growth, while FLV will target out-of-favor companies with prices that do not reflect their true value to arrive at a portfolio of 30 to 50 securities.

Multiple models for nontransparent actively managed ETFs have received the SEC’s blessing in recent months, and issuers are now in a race to launch the first products based on them.

Contact Heather Bell at [email protected]