Ed Rosenberg, SVP, Head of ETFs, American Century Investments joined Julie Cooling, Founder & CEO, RIA Channel to discuss the rise of semi-transparent ETFs and the the evolution of the ETF industry as a whole.
Since American Century entered the ETF market just under three years ago, the firm has launched a robust lineup of equity and fixed income exchange-traded products. The firm, known historically for its actively managed strategies, has embraced the ETF structure in all of its forms, including index, active, and semi-transparent structures.
American Century is one of the fastest growing ETF sponsors in the industry and was the first manager to list an actively managed, semi-transparent ETF. Semi-transparent ETFs, aim to deliver both the cost and tax efficiency of an ETF as well as the potential outperformance of an actively managed strategy.
Last year’s approval of the the semi-transparent structure softened restrictions around disclosing daily holdings, and provided active managers the ability to obscure their security selections and overall alpha generating strategy.
Rosenberg says that, “The best part of these products is that they trade and behave exactly like an ETF. Investors can do whatever they’ve normally been doing.”
American Century’s family of active semi-transparent ETFs include:
- American Century® Focused Dynamic Growth ETF – FDG
- American Century® Focused Large Cap Value ETF – FLV
- American Century® Mid Cap Growth Impact ETF – MID
- American Century® Sustainable Equity ETF – ESGA
The SEC’s approval of active shares, and the semi-transparent ETF structure, has “shined a light on active,” explains Rosenberg on the potential for outperformance. While 2020 may have been the inaugural year of semi-transparent structures, Rosenberg emphasizes that active management will continue to be a cornerstone of American Century’s business model for years to come.
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