Grantham Mayo Van Otterloo is planning to break ground in the $7.4 trillion exchange-traded fund industry.
The $59 billion Boston-based investment company co-founded by Jeremy Grantham filed an application with U.S. regulators for its first ETF, dubbed the GMO U.S. Quality ETF, on Monday.
The actively-managed fund would trade under the ticker QLTY and invest in stocks that GMO "believes to be of high quality," the filing details.
GMO's push into ETFs is driven by demand from the intermediary and wealth management space, according to the firm.
GMO joins a growing list of asset managers launching ETFs in recent years, as the vehicle continues to absorb cash while money drains from mutual funds.
But with $7.4 trillion in assets spread across more than 3,200 US-listed ETFs, GMO potentially faces an uphill battle in attracting attention in an already saturated market.
Not to mention, there's around $58 billion sitting in so-called smart beta ETFs that track the quality factor, Bloomberg Intelligence data shows.
"We're clearly seeing every money manager out there realize they need a strategy in an ETF wrapper," said Todd Sohn, ETF strategist at Strategas. "Their success will be defined by their performance ability as well as if they can succeed in the marketing aspect. That is, why allocate to their actively managed product versus a standard smart-beta strategy?"
