Another Nontransparent ETF Structure Readies for Launch

The actively managed ETF will instead disclose its holdings but not their weights through the daily publication of its Dynamic SSR Portfolio. Another nontransparent ETF strategy, ActiveShares from Precidian Investments, which was the first to get SEC approval, won't publicly disclose its actual holdings daily but rather a "verified intraday indicative value" of them. Only the broker acting as an authorized participant representative that either buys or liquidates an ActiveShares portfolio basket in exchange for cash would know the holdings.

The Nottingham licensing announcement is a step toward the launch of nontransparent ETFs that use Blue Tractor Group's strategy. Sub-advisors managing active portfolio strategies will be able to issue their own branded Shielded Alpha through ETFs through Nottingham's white-label affiliate, OBP Capital LLC.

That's how Nottingham helped launch several more traditional ETFs, including two cannabis ETFs — the Amplify Seymour Cannabis ETF (CNBS) and The Cannabis ETF (THCX) — as well as the Fieldstone UVA Unconstrained Medium-Term Fixed Income ETF (FFIU) and Fieldstone Merlin Dynamic Large Cap Growth ETF (FMDG), which ceased trading in December 2018 after about 16 months.

Blue Tractor Founder Terry Norman, in a statement, said he knows "many active managers now using a traditional mutual fund that are keen to explore the benefit of porting their alpha strategy into to an ETF wrapper."

— Related on ThinkAdvisor:

• SEC Gives 4 Firms Final Approval for Nontransparent ETFs
• A Flood of Nontransparent Active ETFs Could Be Coming — Soon
• SEC Gives Final Nod to First Nontransparent ETF Strategy
• Nontransparent ETFs Could Be Game Changer for Fund Market