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ETF Specialist

Legg Mason to Try Its Hand at ETFs

The firm has filed to launch actively managed exchange-traded funds.

Mentioned:

Another prominent fund shop-- Legg Mason (LM)--plans to join the exchange-traded fund party. The firm filed for exemptive relief on Feb. 22, revealing plans to develop its own suite of actively managed ETFs. At this point, the specific strategies and managers have yet to be determined/disclosed, however, Legg Mason has stated that it is considering both equity and fixed-income funds.

The exemptive relief application process could take several months and is one of the first steps in bringing an ETF to market. If the SEC grants Legg Mason with exemptive relief, we should start learning more about the specifics of the firm's ETF strategy. As of now, the firm isn't planning to convert any of its existing mutual funds into ETFs. Bill Thomas, Grail Advisors CEO, recently disclosed that his firm is close to announcing the conversion of a prominent mutual fund(s) into an actively managed ETF(s). Legg Mason has made clear, however, that this isn't the path it plans to take.

John Gabriel does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.