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Rating:Vanguard Wants This Power, But Doesn't Plan to Use It? Not Rated 0.0 Email Routing List Email & Route  Print Print
Tuesday, July 21, 2015

Vanguard Wants This Power, But Doesn't Plan to Use It?

News summary by MFWire's editors

The Vanguard [profile] crew wants the power to launch active ETFs that are unrelated to their existing traditional mutual funds. Yet it's not clear that they will use that power.

On June 24, the low-cost mutual fund titan amended its exemptive relief application to be able to launch stand-alone active ETFs, not just the active ETF version of other Vanguard funds.

"Fund may opt to only offer a single class of ETF Shares ..." reads footnote six in the filing.

Chris Dieterich of Barron's reported on the filing tweak. Yet despite asking for such capabilities, Vanguard is not in a rush to actually create such active, stand alone ETFs.

Vanguard spokeswoman Emily White emailed MFWire the following statement:

Vanguard does not intend to offer single-class active ETFs at this time. We firmly believe that our share-class structure offers benefits to investors. The second amended exemptive application is consistent with the standard actively managed ETF exemptive applications approved by the SEC for others, except that we seek relief to offer actively managed ETFs in our beneficial multi-class structure. Such standard applications also set forth, among other things, the existence of single-class ETFs and daily disclosure of portfolio holdings.


White also pointed out that in Australia, Canada, Europe, and Hong Kong, Vanguard's ETFs "are generally structured as single-share products." 

Edited by: Neil Anderson, Managing Editor


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