FlexShares, the exchange-traded funds arm of Northern Trust Corp., launched its first actively managed ETF, the FlexShares Ready Access Variable Income Fund (RAVI), a money market ETF that will invest in global short-duration, investment-grade fixed-income products, including U.S. Treasuries.
The new ETF will invests in what Northern Trust identifies as sound corporate, sovereign and asset-backed securities, including those that fall beyond the SEC Rule 2a7 restrictions imposed on registered money market funds, the firm said in a statement. RAVI trades on the New York Stock Exchange’s Archipelago Exchange (NYSEArca).
RAVI carries an expense ratio of 25 basis points—less than many similarly situated ETFs, such as PIMCO’s Enhanced Short Maturity Strategy Fund (MINT), which charges 35 basis points. MINT, which has gathered about $2 billion in assets since launching in late-2009, also is an actively managed ETF that seeks to provide better-than-money-market returns through investments in short-duration, investment-grade fixed-income securities.
RAVI is managed by a trio of portfolio managers: Mike Doyle, Peter Yi and Bilal Memon. All three are vice presidents of Northern Trust Investments.
“We believe RAVI can be used to achieve liquidity and relative higher yields, for investors that can accept some degree of variability in their principal,” said Shundrawn Thomas, head of Northern Trust’s ETF Group. Chicago-based Northern Trust had assets under management of $704.3 billion, as of the end of June.