New Actively Run ETF Launches Today For Trading (GVT)

The first exchange-traded fund whose managers pick its stocks is making its debut Monday.

Unlike other ETFs, which mainly track indexes, the “actively managed” Grail American Beacon Large Cap Value ETF will be comprised of names that the ETF’s managers choose based on research aimed at finding good, cheap stocks.

A few other ETFs bill their portfolios as “actively managed,” meaning the stocks aren’t bought simply because they mirror those in an index such as the Standard & Poor’s 500-stock index. But in those actively managed ETFs, offered by Invesco Ltd.’s PowerShares Capital Management LLC, managers buy stocks based on computer models.

Grail’s ETF mark “the next step in the ETF evolution,” says William Thomas, chief executive of Grail Advisors LLC, a unit of San Francisco merchant bank Grail Partners LLC. ETFs are bundles of securities that are traded on exchanges throughout the day, unlike conventional mutual funds. Unlike closed-end funds, which also are traded on exchanges but are sold by a firm only during the initial public offering, ETFs are offered to investors continuously.

The Grail ETF will charge fees of 0.79% of assets, compared with the 1.4% fee for a typical stock mutual fund, according to fund tracker Morningstar Inc.

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