ETFs That Hide Their Holdings Are Coming for Your Mutual Fund
After more than 10 years of effort, Dan McCabe's ActiveShares ETFs are almost ready to launch.
Dan McCabe is on a quest to transform your finances. The chief executive officer of Bedminster, N.J.-based Precidian Investments has a new way to invest that could make thousands of mutual funds obsolete, and he’s persuaded the likes of BlackRock Inc. to license the idea.
His big pitch? An exchange-traded fund that hides its holdings. Active managers have largely steered clear of the rapidly expanding $4 trillion U.S. market for ETFs, fearing that the daily disclosure these funds require would compromise their secret sauce. But McCabe’s patented structure allows ETFs to report once a quarter, like a mutual fund, protecting that intellectual property. As a result, stockpickers’ most popular strategies could be coming soon to an exchange near you.