Clarke Wins Eaton Vance's First ETMF Convert
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Friday, January 16, 2015

Clarke Wins Eaton Vance's First ETMF Convert

Gene Needles is betting on Eaton Vance's [profile] vision of an ETF-like future for active mutual fund managers.

Yesterday Needles confirmed that American Beacon [profile] is teaming up with Eaton Vance's Navigate Fund Solutions subsidiary to launch American Beacon's own NextShares exchange-traded managed funds (ETMFs). For the first round, American Beacon is prepping five ETMFs for which it already offers mutual fund versions of the strategies.

Eaton Vance's ETMF idea cleared multiple regulatory hurdles in the fall.

The ETMF structure, says American Beacon chief operating officer Jeff Ringdahl, "combines some of the best features of mutual funds and ETFs." In particular, Ringdahl likes that, like a mutual fund but not like an ETF, an ETMF can better avoid front-running thanks to non-daily portfolio disclosures.

"The benefits aren't maximized for every investment strategy, but there are plenty of investment strategies for which this structure will deliver better performance," Ringdahl tells MFWire. "We're happy to be a licensee rather than a pioneer."

"This structure fits nicely with one key tenet of our product development: innovative solutions with enduring value," Ringdahl adds. "I don't see a reason why we wouldn't offer substantially all of our investment products in both a mutual fund and an ETMF format [eventually]."

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