Grail actively managed ETF begins trading

The Grail American Beacon Large Cap Value ETF (GVT), an actively managed exchange traded fund, began trading today on the New York Stock Exchange. Grail Advisors LLC of San Francisco is the ETF’s manager. Similar to traditional actively managed mutual funds, the new ETF allows portfolio managers unrestricted trading. The ETF is subadvised by Fort Worth, Texas-based American Beacon Advisors Inc., a manager of managers. Assets in the new Grail Advisors ETF will be allocated among three investment managers: Brandywine Global Investment Management LLC of Philadelphia; Hotchkis and Wiley Capital Management LLC of Los Angeles; and Metropolitan West Capital Management LLC of Newport Beach, Calif. “With a team of veteran managers delivering traditional active management, the Grail American Beacon Large Cap Value ETF is a step forward in the evolution of exchange traded funds,” William M. Thomas, chief executive of Grail Advisors said in a statement. “We’ve married all the benefits of an ETF structure — lower costs, tax efficiency, transparency of holdings and intra-day trading — with actively managed strategies from a leading asset manager.” The Grail American Beacon Large Cap Value ETF is the first in a series of planned offerings by Grail Advisors. A second ETF — the Grail American Beacon International Equity ETF — is on track to begin trading later this year and will be the first ETF in the international equity sector to incorporate traditional active management. Grail Advisors is in discussions with a number of financial institutions and asset managers, and it expects to launch a number of customized, actively managed ETFs, including single-manager funds that will provide daily disclosure on all holdings, Mr. Thomas said. “We’re looking to partner with leading investment management firms that consider full disclosure a competitive advantage in the retail marketplace,” he said. “Daily transparency is a major benefit to index ETF investors, and it’s one of the major components of our actively managed strategy.”