Magazine article American Banker

Grail Advisors, a Tyro, Bets on Actively Managed ETFs

Magazine article American Banker

Grail Advisors, a Tyro, Bets on Actively Managed ETFs

Article excerpt

Byline: Matt Ackermann

The actively managed exchange-traded funds sector is increasingly going mainstream, and Grail Advisors is riding right along with it.

Grail is aggressively expanding its product lineup, introducing two fixed-income funds Friday that brought to seven its stable of actively managed exchange-traded funds.

William Thomas, the chief executive officer of the San Francisco money manager, said in an interview that the company plans to introduce still more equity and fixed-income actively managed ETFs and is in talks with mutual fund companies that are interested in converting to the products.

"We expect to significantly ramp up assets now that we have been in [the] market for almost a year," he said. "We should be between $500 million and $800 million [of assets under management] by the end of the year."

Grail said Friday that it had introduced the Grail McDonnell Intermediate Municipal Bond ETF and the Grail McDonnell Core Taxable Bond ETF. Both portfolios are actively managed and subadvised by McDonnell Investment Management LLC, a Chicago fixed-income specialist that manages more than $13 billion of assets.

Thomas said the funds are important for Grail's lineup because they "provide a kind of transparent, liquid and low-cost exposure to the bond market that should enable investors and financial advisers to implement strategies more effectively than they could with traditional fixed-income mutual funds."

Grail started its first actively managed ETFs in May. …

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