Thursday, April 18, 2013
Monday, April 15, 2013
If approved by the Securities and Exchange Commission, the investment vehicle could make it unnecessary to disclose portfolio holdings every day -- and in so doing potentially reshape the mutual fund industry, which has relied on infrequent disclosure of holdings to protect the ability of managers to achieve above-average returns and avoid front running.It does seem challenging to maintain a market in something that you don't know the value of:
But Ben Johnson, director of passive funds research at Morningstar, said that the lack of portfolio transparency might prevent market makers from buying into the idea of EMTFs and participating. “We’ll have to see what this looks like in practice once you get these products in a live trading environment,” he saidBut maybe no worse than making a market in IBM, a feat that always amazes me.