As of May 15, 2024, 12 firms have sought exemptive relief from the SEC to offer active ETF share classes.
If regulators approve, firms can expand access to strategies while sidestepping operational challenges. Firms wouldn’t have to worry about retirement plan assets, disrupted distribution networks, or creating new investment strategies.
ETFs also boost the tax efficiency of the mutual fund share classes. In turn, the ETFs benefit from the mutual funds’ track record and assets.
There’s one potential downside. Early on, ETF investors could face distributions from preexisting capital gains and sharing of portfolio costs.