American Century Investments (American Century) has launched two actively managed, semi-transparent exchange traded funds (ETFs), which will utilise Precidian Investments' ActiveShares methodology.
It is the first firm to offer semi-transparent actively managed ETFs to clients.
The American Century Focused Dynamic Growth ETF (FDG) and American Century Focused Large Cap Value ETF (FLV) will be available exclusively through the Cboe BZX Exchange.
Citadel Securities is set to act as the lead market maker, serviced by State Street, which is both authorized participant representative (APR) and custodian.
The semi-transparent structure will allow American Century to deliver actively managed investment strategies in an ETF vehicle, without the daily holdings disclosure obligations of fully transparent ETFs.
Another advantage for a semi-transparent ETF over its traditional counterpart is that it can minimise the risk of traders predicting or copying its investment strategy. American Century believe this could have a positive effect on performance.
Meanwhie, Precidian's ActiveShares structure aims to combine the most beneficial aspects of the traditional mutual fund with the efficiencies and flexibilities of an ETF.
Precidian's patented ETF structure seeks to provide asset managers with the ability to generate excess return without daily disclosure of their proprietary strategies while simultaneously creating significant improvements in tax efficiency, manager flexibility and lower operating costs.
FDG invests in stocks of early and rapid stage large-cap growth companies, which have the potential to increase in value over time. The fund is managed by an experienced senior team consisting of multiple portfolio managers. This includes Keith Lee, senior vice president and senior portfolio manager, Michael Li, vice president and senior portfolio manager, Prabha Ram, portfolio manager, Henry He, portfolio manager and Rene Casis, ETF portfolio manager.
By contrast, FLV focuses on large-cap, high-quality companies the managers believe are temporarily selling at a discount. The fund is managed by Phillip Davidson, senior vice president and executive portfolio manager, Brian Woglom, vice president and senior portfolio manager, Phil Sundell, portfolio manager, Kevin Toney, chief investment officer, Global Value Equity and senior portfolio manager, Michael Liss, vice president and senior portfolio manager and Rene Casis, ETF portfolio manager.
Jonathan Thomas, American Century's chief executive officer said: "Our goal at American Century Investments has long been providing active management solutions that meet their evolving needs."
Ed Rosenberg, head of ETFs, added: "This new type of ETF gives American Century one of the most diverse platforms in the industry and allows us to introduce products with our unique insights.”
