As New Active ETF Providers Gear Up, Bear Stearns Fund To Close

Another entrant into the actively managed exchange traded fund (ETF) realm is a few steps closer to reality: Grail Advisors LLC of San Francisco has its application in the comment phase with the Securities and Exchange Commission (SEC).

Grail has been waiting since September of last year for the SEC to approve its request for an exemption, reports John D’antona Jr. for Investment News. CEO William Thomas says he expects the exemption for transparent, actively managed equity ETFs to be granted.

Thomas says he plans to work with banks and other financial institutions to create and market customized ETFs. The first will be large- and mid-cap growth and value funds. Introduced later might be international equities, small-cap stocks and fixed income.

Meanwhile, the first actively managed ETF, Bear Stearns Current Yield (YYY) has announced that it is closing. Its shares will be liquidated on or about Oct. 1.

After J.P. Morgan rescued Bear Stearns in March, just before the fund launched, many wondered what it would mean for this ETF. With all the troubles that have hit the financial markets lately, it looks like this ETF didn’t stand a chance.

Once Grail’s funds are launched, they will join a small but growing list of other active ETFs, including four from PowerShares and eight currency funds from WisdomTree, which have been defined by the SEC as actively managed.

Pimco has also filed for a line of actively managed bond ETFs.

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