• Jeremy Grantham’s GMO has filed with regulators to create its first ETF.
  • The proposed fund can be actively managed and deal with top quality shares.
  • This comes as funding corporations are turning in the direction of ETFs over mutual funds, which have fallen in recognition. 

Jeremy Grantham’s GMO is hopping into the ETF business in a primary for the $59 billion funding agency.

The proposed fund can be an actively-managed ETF with a deal with equities the corporate considers top quality, an software filed Monday with the Securities and Trade Fee stated. Often called the GMO US High quality ETF, it could function below the ticker QLTY.


The submitting outlined top quality corporations as people who “will ship a excessive stage of return on previous investments and that may use money flows to make investments with the potential for a excessive return on capital or to return money to shareholders by means of dividends, share buybacks, or different mechanisms.”

GMO’s bid is a component of a bigger business swerve into the ETF area, because the funding automobile continues to realize amid a slide in mutual funds, Bloomberg reported — on the finish of 2022, a $1.5 trillion hole had fashioned between the 2 sorts of funds, as belongings managed by ETFs soared. 

In line with its web site, GMO manages practically 30 mutual funds. The ETF’s creation got here from middleman and wealth administration demand, a GMO spokesperson stated in a press release.

However by getting into the $7.4 trillion business, Grantham’s ETF will face the problem of discovering area in an oversaturated nook of the market. It is particularly made harder amid an abundance of quality-focused ETFs already obtainable to buyers.

Grantham co-founded GMO in 1977, and is a reputed Wall Avenue investor for predicting the dot-com and 2008 crash. Not too long ago, he forecast a coming recession that might spiral into 2024, and holds little hope of inflation returning to its historic common and sees costs staying elevated for the foreseeable future.

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