NEW YORK, May 28, 2020 /PRNewswire/ -- Legg Mason,
Inc. (NYSE: LM) and its affiliate, ClearBridge Investments, LLC,
today announced the launch of Legg Mason's first exchange-traded
fund (ETF) using the semi-transparent technology of Precidian
Investments LLC, ActiveShares®.
The ClearBridge Focus Value ETF (CFCV), a series of Legg Mason's
ActiveShares® ETF Trust, trades on the Chicago Board Options Exchange (Cboe) and
seeks long-term capital appreciation. The ETF is backed by
ClearBridge's proven expertise in active management and through the
use of Precidian's ActiveShares® technology, its strategy is able
to be delivered in a confidential format to safeguard both the ETF
and its investors.
The launch represents the culmination of many years' work in the
development of the ActiveShares® ETF structure. The methodology
seeks to bring the best of the ETF structure and active management
together. The ActiveShares® ETF structure's unique combination
of cost and tax efficiencies, real-time pricing and confidential
format can benefit both asset managers and investors.
"This ground-breaking ETF is part of our commitment to
delivering active investment excellence in the vehicles our clients
and investors demand. This is another exciting step in the
development of ETFs, giving investors greater choice and more
opportunities to invest in otherwise inaccessible active strategies
in a highly efficient and confidential ETF wrapper," said
Terrence Murphy, CEO of ClearBridge
Investments.
ClearBridge Investments and Legg Mason partnered with Precidian
Investments to develop the ETF and all are excited to offer this
investment opportunity to investors. "I want to thank
Joe Sullivan for his foundational
support, and the various teams at Legg Mason who worked tirelessly
to make this evolution in product structure a reality.
Additionally, I am pleased to partner with Terrence Murphy, who has the vision to realize
the potential of what we believe to be a burgeoning marketplace,"
said Dan McCabe, CEO of Precidian
Investments.
Legg Mason is affiliated with Precidian Investments and
announced on its January earnings call that it had notified
Precidian that it would begin the due diligence process on
exercising its option to increase its 19.9% equity stake in
Precidian Investments to a majority ownership stake.
"The launch of this innovative ETF structure with Precidian,
ClearBridge and other industry partners is the perfect example of
how we have sought to provide investors with better choice of
vehicles and strategies," said Joseph A.
Sullivan, Chairman and CEO of Legg Mason."
Mr. Sullivan added, "Precidian's ActiveShares® structure is not
only an evolution in ETFs, but also a potential game-changer for
active management. It has the potential over time to transform how
retail investors access the best active strategies. I congratulate
Dan McCabe and his team for their
persistence and dedication in working with Legg Mason and others in
the industry to bring ActiveShares® to market so successfully."
Key third-party partners in launching the ClearBridge Focus
Value ETF are BNY Mellon, IHS Markit, Cantor Fitzgerald, Mizuho and
GTS Mischler, in addition to the Chicago Board Options Exchange (Cboe).
"We are very excited to work with a group of innovative market
participants to deliver a digital solution to the long-awaited
semi-transparent actively managed ETF market," said Emily Portney, Global Head of Client Coverage
and Head of Americas, BNY Mellon Asset Servicing.
ActiveShares Background
The first two
actively-managed ETFs utilizing Precidian's proprietary
ActiveShares® structure were launched by American Century
Investments (ACI) on April 2nd.
There has been significant interest by asset managers in
licensing the ActiveShares® technology. Currently, the
technology has been licensed by 14 licensees, covering 26% of the
actively managed U.S. equity market.
ETF Objective and Process
Precidian Funds LLC serves
as the ETF's investment manager and . ClearBridge
Investments, LLC, the subadviser, is responsible for managing the
ETF on a day-to-day basis. The portfolio managers are Robert Feitler Jr. and Dmitry Khaykin, Managing Directors and Portfolio
Managers with ClearBridge Investments. Feitler and Khaykin have 25
years and 23 years of industry experience, respectively.
The ClearBridge Focus Value ETF offers investors access to a
strategy that seeks to identify a select number of large
capitalization stocks able to deliver attractive risk-adjusted
returns. The ETF's portfolio managers employ fundamental
research to identify such stocks, constructing the portfolio on a
bottom-up basis.
The ETF normally will invest at least 80% of its net assets in
equity securities of companies with large market capitalizations.
The ETF may also invest up to 20% of its net assets in equity
securities of companies with lower market capitalizations.
While most of the ETF's investments will be in U.S. companies,
the ETF may also invest in American Depository Receipts (ADRs) and
U.S.-listed shares of foreign companies. Under normal
circumstances, the ETF will invest in a diversified portfolio
typically consisting of 30 to 40 issuers.
About Legg Mason
Guided by a mission of Investing to
Improve Lives™, Legg Mason helps investors globally achieve
better financial outcomes by expanding choice across investment
strategies, vehicles and investor access through independent
investment managers with diverse expertise in equity, fixed income,
alternative and liquidity investments. Legg Mason's assets under
management are $763.1 billion as
of April 30, 2020. To learn more, visit our website, our
newsroom, or follow us on LinkedIn, Twitter, or Facebook.
Active share reflects the percent of a portfolio that differs
from the index.
American Depository Receipts ("ADRs") are U.S. traded securities
that represent shares of a foreign-based corporation held by a
custodian.
The Fund is newly organized, with a limited history of
operations. Equity securities are subject to price fluctuation
and possible loss of principal. International investments are
subject to special risks, including currency fluctuations and
social, economic and political uncertainties, which could increase
volatility. These risks are magnified in emerging markets. Short
selling is a speculative strategy. Unlike the possible loss on a
security that is purchased, there is no limit on the amount of loss
on an appreciating security that is sold short. Derivatives, such
as options and futures, can be illiquid, may disproportionately
increase losses, and have a potentially large impact on Fund
performance. The manager's investment style may become out of favor
and/or the manager's selection process may prove incorrect, which
may have a negative impact on the Fund's performance.
Before investing, carefully consider a Fund's investment
objectives, risks, charges and expenses. You can find this and
other information in each prospectus, or summary prospectus, if
available, which is available at www.leggmasonfunds.com. Please
read it carefully.
©2020 Legg Mason Investor Services, LLC, member FINRA, SIPC.
Legg Mason Investor Services, is a subsidiary of Legg Mason, Inc.
American Century Investments is not affiliated with Legg Mason,
Inc.
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SOURCE Legg Mason, Inc.