Quantcast
The MFWire
Manage Email Alerts | Sponsorships | About MFWire | Who We Are

Subscribe to MFWire.com's News Alerts [click]

Rating:Faust Ponders Five Bps of $10T Not Rated 0.0 Email Routing List Email & Route  Print Print
Friday, March 6, 2015

Faust Ponders Five Bps of $10T

News summary by MFWire's editors

Five basis points of $10 trillion. That's the dream of Eaton Vance's [profile] ETF-like alternative product structure for active managers.

The Boston-based mutual fund shop's Navigate Fund Solutions arm has already won over three other fund shops -- American Beacon, Gamco, and the Hartford -- to license Eaton Vance's exchange-traded managed funds structure, branded NextShares. And now Tom Faust seems to have won over the New York Times, and maybe Morningstar, too.

Landon Thomas Jr. of the Times interviews the Eaton Vance CEO about the fund firm's innovation, which was recently blessed by the SEC. Eaton Vance charges those who license the ETMF structure five basis points, and Faust notes that five bps of the $10 trillion in active mutual funds is $5 billion, roughly equal with Eaton Vance's current market capitalization ($4.98 billion as of market close on Thursday). As of January 31, Eaton Vance had $295.7 billion in assets under management.

Meanwhile, M*'s Scott Cooley (director of policy research) also ponders ETMFs, digging deeper into the ideas behind the new structure. He comes down as "cautiously optimistic that exchange-traded managed funds will ultimately [emphasis included in the original] attract meaningful assets." He posits that ETMFs "may give active managers more of a fighting chance in their competition with passive strategies.

Like traditional ETFs, ETMFs can be tax-friendlier and meant to help keep costs down. Yet ETMFs don't involve daily disclosures of holdings, an appealing change for active PMs worried about front-running. And while investors can pay a slight premium or receive a slightly discounted price to buy or sell the ETMFs throughout the day, the funds will technically trade once per day.

"We are changing the social contract with mutual fund investors," Faust tells the Times. "If the industry does not do this, a lot of people will be out of jobs." 

Edited by: Neil Anderson, Managing Editor


Stay ahead of the news ... Sign up for our email alerts now
CLICK HERE

0.0
 Do You Recommend This Story?



GO TO: MFWire
Return to Top
 News Archives
2024: Q4Q3Q2Q1
2023: Q4Q3Q2Q1
2022: Q4Q3Q2Q1
2021: Q4Q3Q2Q1
2020: Q4Q3Q2Q1
2019: Q4Q3Q2Q1
2018: Q4Q3Q2Q1
2017: Q4Q3Q2Q1
2016: Q4Q3Q2Q1
2015: Q4Q3Q2Q1
2014: Q4Q3Q2Q1
2013: Q4Q3Q2Q1
2012: Q4Q3Q2Q1
2011: Q4Q3Q2Q1
2010: Q4Q3Q2Q1
2009: Q4Q3Q2Q1
2008: Q4Q3Q2Q1
2007: Q4Q3Q2Q1
2006: Q4Q3Q2Q1
2005: Q4Q3Q2Q1
2004: Q4Q3Q2Q1
2003: Q4Q3Q2Q1
2002: Q4Q3Q2Q1
 Subscribe via RSS:
Raw XML
Add to My Yahoo!
follow us in feedly




©All rights reserved to InvestmentWires, Inc. 1997-2024
14 Wall Street | 20th Floor | New York, NY 10005 | P: 212-331-8968 | F: 212-331-8998
Privacy Policy :: Terms of Use