Neuberger Berman Latest Entrant In Active ETF Arena

Neuberger Berman, an asset management firm based out of New York, has filed with the SEC to launch actively-managed ETFs. The firm’s filing contained generic details on what type of assets the funds may invest in and what investment strategies it may employ. Firms at this stage of the product development process try to keep their application for exemptive relief from the SEC generic and broad so that if granted, the managers have enough flexibility in the types of investment strategies they can bring market. In this case, Neuberger Berman specified that their funds may invest in equity or fixed-income securities in US or non-US markets, as well as in foreign currencies and possibly other funds and ETFs.

Providing detail on the initial fund planned, the application indicated that its expected investment objective is to seek long-term growth of capital by investing primarily in US and non-US equities that could be small, mid or large-cap stocks. As with all actively-managed ETFs in the US, the fund will provide market participants information regarding any change in portfolio composition on a T+1 basis. Neuberger Berman Management would serve as the advisor to these funds.

Neuberger Berman joins a long list of other major financial players who have shown interest in launching actively-managed ETFs. The SEC though has been slow to grant approval for the numerous filings that have been made from players like Eaton Vance, JP Morgan, Legg Mason, T. Rowe Price and AllianceBernstein. As a result, the approval process can take anywhere from 6 months at the earliest to 2 years as many providers have seen. The lack of clarity from the SEC on their stance on actively-managed ETFs has been a major hurdle for many product managers because their product development cycle becomes entirely dependent on receiving approval for their proposed Active ETFs.

Written By Shishir Nigam from ActiveETFs | InFocus  Disclosure: No positions in above-mentioned names.

Shishir Nigam is the founder of ActiveETFs | InFocus (, which provides extensive coverage and analysis of actively-managed ETFs in US and Canada, including debates on major industry trends, insights on the latest product launches from issuers in the Active ETF space as well as in-depth interviews with industry executives and thought leaders.

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