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May 29, 2020 at 10:19 AM
Another nontransparent ETF has launched, just eight weeks after the first two.
The ClearBridge Focus Value ETF (CFCV) uses the ActiveShares structure, like the two nontransparent ETFs launched in early April by American Century, allowing portfolio managers of actively managed funds to disclose fund holdings with a lag, unlike ordinary ETFs. Only a representative of the ETF’s authorized participants will have knowledge of the fund’s daily holdings.
Legg Mason and its affiliate ClearBridge Investments announced the launch. The new ETF is a large-cap equity ETF that seeks long-term capital appreciation and employs a bottom-up fundamental approach to stock selection, according to a filing with the Securities and Exchange Commission. Its holdings will be disclosed quarterly with a 15-day lag.
The ETF trades on the Cboe, like the two American Century nontransparent ETFs that launched in April — the American Century Focused Dynamic Growth ETF (FDG) and American Century Focused Large Cap Value ETF (FLV) — and charges a fee of 49 basis points, according to the SEC filing. After a year the ETF could levy an additional 25 basis-point 12b-1 fee.
In his statement about the new Legg Mason/Clearbridge ETF, Clearbridge CEO Terrence Murphy said the ETF — which he, like others, refers to as “semi-transparent” — provides “greater choice and more opportunities to invest in otherwise inaccessible active strategies in a highly efficient and confidential ETF wrapper.”
Precidian Funds, which is partially owned by Legg Mason, is the investment manager for the ETF, and ClearBridge Investments is its subadvsior responsible for managing the ETF on a daily basis.
