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American Century Partners With NYSE on Semi-Transparent ETFs

The move brings the company one step closer to introducing semi-transparent active ETFs.

American Century Investments, the Kansas City, Mo.-based asset manager, said Wednesday it has entered into a licensing agreement to offer actively managed, semi-transparent ETFs using the New York Stock Exchange’s methodology, called the NYSE Actively Managed Solution.

The move brings the company one step closer to introducing semi-transparent active ETFs. This new structure could change the industry by allowing for active managers with tried-and-true equity strategies to finally feel comfortable taking advantage of the ETF wrapper. It works by allowing windows of transparency when holdings and trades are available to the trading public every 15 or 30 days.

Under the NYSE methodology, American Century will provide daily disclosures of a proxy portfolio, which reflects the economic exposures and risk characteristics of the portfolio, without revealing the actual holdings. This reduces front-running and intellectual property theft.

American Century signed a similar agreement earlier this year with Precidian to use its methodology. It was one of the first asset managers to file for exemptive relief for the new ETF structure. The firm has been building out its ETF business over the last couple years, bringing on Edward Rosenberg from Northern Trust’s FlexShares business to lead its ETFs initiative in 2017.

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