Legg Mason wants to launch active ETFs

February 24, 2010

Baltimore's Legg Mason Inc. filed an application Monday with the Securities and Exchange Commission to launch actively managed exchange-traded funds. Actively managed ETFs have been around for about two years and there are now fewer than two dozen, although that number is expected to grow. In December, Baltimore's T. Rowe Price Associates also filed an application with the SEC to launch a series of active ETFs. ETFs are similar to index mutual funds but can be traded throughout the day like a stock. Most ETFs passively imitate an index. The new breed of actively managed ETFs gives portfolio managers leeway to diverge from an index, such as changing the allocation in an attempt to outperform the index. Legg intends to offer stock and bond ETFs that will follow an investment style or process, said spokeswoman Mary Athridge.

- Eileen Ambrose

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