Invesco Wants to Combat Front-Runners With Nontransparent ETFs
- ETF head Paglia says transparency isn’t right for all products
- Firm licenses Fidelity methodology, pursues proprietary model
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Invesco Ltd. is looking to active, nontransparent exchange-traded funds as the next step forward for the $4.6 trillion industry, hoping the new products will be less vulnerable to traders who exploit expected changes in ETF holdings.
The Atlanta-based investment firm, which currently manages $1.2 trillion, is pursuing both a methodology from Fidelity Investments that keeps some holdings hidden to protect strategies, as well as its own proprietary structure, because “the risk of front-running is real,” according to Anna Paglia, head of ETFs and indexed strategies for Invesco.