American Stock Exchange CEO Neal Wolkoff said Monday the Amex now has patents that will enable the launch of the first truly actively managed ETFs -- which he expects to see within the year. To date, almost all of the nearly 500 U.S. publicly traded ETFs replicate an index of securities that is reconstituted periodically. There is no ETF that changes its positions as frequently as daily. Traditional mutual funds are rebalanced daily, but only priced once a day -- at which point the manager buys and sells shares in its active issues to maintain the fund's balance. An up-to-date list of mutual fund holdings is considered confidential. ETFs trade and fluctuate throughout the day. The novelty of the new software is that it enables ETF managers to publish their fund's value intraday, while keeping its asset-mix under wraps. Wolkoff said the Amex already has one 'committed issuer' lined up to open an actively managed ETF, and said others are exploring the idea. "We think there will be a lot of investor demand," Wolkoff said. "The Amex will be able to earn revenue whether we're the transaction venue or not."
Commentary: Vanguard Files For Actively Managed Fixed Income ETF • Vanguard Could Be First To Offer Actively Managed ETF • In Search of an Actively Managed ETF : Does it Already Exist?
Stocks/ETFs to watch: State Street Corp. (NYSE:STT), WisdomTree Investments Inc. (WSDT.PK), Amvescap plc (AVZ), Barclays plc (NYSE:BCS), Merrill Lynch & Co. Inc. (MER), Bank of New York Company Inc. (NYSE:BK) [ETF issuers]
Seeking Alpha's news briefs are combined into a pre-market summary called Wall Street Breakfast. Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.