Claymore Jumps Into Actively-Managed ETF Game

by on June 16, 2009 | ETFs Mentioned:

Claymore Advisors, sponsor of 35 passively-managed ETFs, has filed for exemptive relief with the SEC to launch three actively-managed ETFs, the latest indication that these “hybrid” funds could fuel the next wave of the ETF industry boom. The three proposed funds are:

  • Claymore/S&P Commodity Trends Strategy ETF: Will seek to match the results of “a benchmark which the Adviser believes is appropriate for measuring trends in the commodities market.” This ETF will invest primarily in commodity-linked derivatives.
  • Claymore Active National Municipal ETF: Will attempt to outperform the Barclays Capital 7-Year Municipal Bond Index, generating current income that is exempt from regular federal income tax.
  • Claymore Laffer Macro Economic Global Equity ETF: The most intriguing of the three potential funds, this ETF will be managed by the firm of Art Laffer, the economist best known for the curve illustrating tax elasticity that bears his name. It appears that this ETF will actually be an “ETF of ETFs,” investing in company-specific funds and aiming to “identify the most relatively undervalued equity markets around the world.”

In the five weeks since Grail Advisors launched the first true actively-managed ETF, the news wire has been buzzing with details of several additional funds from a number of different sponsors. Last week, WisdomTree announced the launch of three actively-managed funds that will pursue hedge fund strategies, while IndexIQ launched the IQ Hedge Macro Tracker (MCRO), the second fund in its hedge fund ETF family. And of course Grail, the pioneers of the actively-managed ETFs, made headlines with news they will launch another four active funds, apparently encouraged by the initial successes of GVT.

Actively-managed ETFs provide many of the benefits of the ETF structure, including lower costs, intraday trading, and greater transparency, while allowing managers to use their discretion in an attempt to outperform a benchmark. While I’m not soldon active management in general, it appears that ETF sponsors are finding a receptive audience and are optimistic on the prospects for the market. While none of the industry’s “big dogs” have joined the fray yet, rest assured that all are carefully monitoring these developments and analyzing their probability of success in this still-forming middle ground between the ETF and mutual fund markets.

Given the short trading history of the few active funds on the market, it’s far too early to tell if these ETFs can “walk the walk,” but their performance relative to both their benchmarks and their passively-managed peers will be heavily scrutinized over the coming months. In the meantime, it appears likely that sponsors will continue to rush in, hoping to stake their claim to various niches as we wait to see just how successful this market will be.