The mutual-fundification of the ETF industry now begins.
Grail Advisors launched its first ETF, the Grail American Beacon Large Cap Value ETF (GVT), Monday on the New York Stock Exchange. The San Francisco-based fund manager says this fund “represents the industry’s first ETF to use traditional active management.”
Grail says this new offering is similar to traditional actively-managed mutual funds and unlike other active-equity ETFs currently in the marketplace, because it allows portfolio managers unrestricted trading.
One needs to ask if this is a good thing for the ETF industry? And more important, is this a good thing for investors? The answer to the first question is “I’m not really sure.” The answer to the second? A definite no.
It’s late and I’ve been out of the office all day Monday. But I will update this post with a full analysis on Tuesday.