Company Press Release

SAN FRANCISCO – January 29, 2010 – Grail Advisors, an innovator in the development and distribution of active-managed exchange traded funds (ETFs), today announced that trading of the Grail McDonnell Intermediate Municipal Bond ETF (GMMB) and the Grail McDonnell Core Taxable Bond ETF (GMTB) has begun on the New York Stock Exchange.

Both of the new Grail McDonnell bond offerings will combine all the benefits of an ETF structure—lower costs1, tax efficiency2, transparency of holdings, and intra-day trading—with actively-managed strategies from a veteran fixed-income management team. Similar to traditional actively-managed mutual funds, the Grail McDonnell offerings will allow the portfolio managers unrestricted trading.

McDonnell Investment Management, LLC (McDonnell), a Chicago-based fixed-income specialist responsible for more than $13 billion in assets under management3 is sub-advising both funds. Grail Advisors will serve as the funds’ manager.

“These fixed-income funds are particularly important additions to our actively-managed ETF lineup,” says William M. Thomas, CEO of Grail Advisors LLC. “Both funds provide a kind of transparent, liquid4, and low-cost exposure to the bond market that should enable investors and financial advisors to implement strategies more effectively than they could with traditional fixed-income mutual funds.”

Expenses for the Grail McDonnell Intermediate Municipal Bond ETF and the Grail McDonnell Core Taxable Bond ETF will be noticeably less than similarly-managed mutual funds. Both of the funds will limit their maximum expense ratios to 0.35% annually. By comparison, the average expense ratio for the Morningstar Municipal National Intermediate category is 0.92% and the average expense ratio for the Morningstar Intermediate Term Bond category is 0.96%.5

“In our opinion, combining the attractive features of investing in bond securities with the benefits of the ETF format is a near-perfect match,” says Michael Kamradt, Chief Investment Officer for McDonnell. “More than that, we think this is an excellent time to bring our credit research process to market. And we couldn’t ask for a better, or more innovative, partner, in this endeavor than Grail Advisors.”

San Francisco-based Grail Advisors intends to increasingly make the benefits of ETFs available to the large pool of investors who currently select traditional mutual funds or other vehicles to access active portfolio management. Mr. Thomas says Grail Advisors is currently in discussions with a number of leading financial institutions and asset managers, and expects to launch a number of customized, actively-managed ETFs that will provide full, daily disclosure on all holdings.