Legg Mason launches semi-transparent ETF

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Legg Mason and its affiliate, ClearBridge Investments, LLC, have launched Legg Mason’s first ETF using the semi-transparent technology of Precidian Investments LLC, ActiveShares.

The ClearBridge Focus Value ETF (CFCV), a series of Legg Mason’s ActiveShares ETF Trust, trades on the Chicago Board Options Exchange (Cboe) and is designed to seek long-term capital appreciation. The ETF is backed by ClearBridge as active managers and through the use of Precidian’s ActiveShares technology, which means its strategy is able to be delivered in a confidential format designed to safeguard both the ETF and its investors.

The launch represents the culmination of many years’ work in the development of the ActiveShares ETF structure, the firm writes. The methodology seeks to bring the best of the ETF structure and active management together. 

“This ground-breaking ETF is part of our commitment to delivering active investment excellence in the vehicles our clients and investors demand. This is another exciting step in the development of ETFs, giving investors greater choice and more opportunities to invest in otherwise inaccessible active strategies in a highly efficient and confidential ETF wrapper,” says Terrence Murphy, CEO of ClearBridge Investments.

ClearBridge Investments and Legg Mason partnered with Precidian Investments to develop the ETF and all are excited to offer this investment opportunity to investors. “I want to thank Joe Sullivan for his foundational support, and the various teams at Legg Mason who worked tirelessly to make this evolution in product structure a reality. Additionally, I am pleased to partner with Terrence Murphy, who has the vision to realise the potential of what we believe to be a burgeoning marketplace,” says Dan McCabe, CEO of Precidian Investments.

Legg Mason is affiliated with Precidian Investments and announced on its January earnings call that it had notified Precidian that it would begin the due diligence process on exercising its option to increase its 19.9 per cent equity stake in Precidian Investments to a majority ownership stake.

“The launch of this innovative ETF structure with Precidian, ClearBridge and other industry partners is the perfect example of how we have sought to provide investors with better choice of vehicles and strategies,” says Joseph A. Sullivan, Chairman and CEO of Legg Mason.”

Sullivan adds: “Precidian’s ActiveShares structure is not only an evolution in ETFs, but also a potential game-changer for active management. It has the potential over time to transform how retail investors access the best active strategies. I congratulate Dan McCabe and his team for their persistence and dedication in working with Legg Mason and others in the industry to bring ActiveShares to market so successfully.”

Key third-party partners in launching the ClearBridge Focus Value ETF are BNY Mellon, IHS Markit, Cantor Fitzgerald, Mizuho and GTS Mischler, in addition to the Chicago Board Options Exchange (Cboe).

“We are very excited to work with a group of innovative market participants to deliver a digital solution to the long-awaited semi-transparent actively managed ETF market,” said Emily Portney, Global Head of Client Coverage and Head of Americas, BNY Mellon Asset Servicing.

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