Nuveen, the investment management arm of TIAA, is seeking exemptive relief from the Securities and Exchange Commission to offer both ETF share classes of mutual funds and mutual fund share classes of ETFs, a recent filing shows.
“Nuveen is simply the latest in what has become a long line of asset managers seeking to use the ETF share class structure,” Nate Geraci, president of The ETF Store, an investment advisory firm specializing in ETFs, said. “Many of the most prominent names in asset management are now pursuing this structure, and I expect the list of firms to continue growing.”
While Geraci, who also hosts the weekly podcast “ETF Prime,” believes the SEC will ultimately approve those requests, “the time frame could extend well into 2025 — if not beyond,” he said.
The Sept. 9 filing listed a number of applicants including Nuveen Fund Advisors, Nuveen Asset Management and Teachers Advisors. Like others before it, the Nuveen filing cited an exemptive order granted by the SEC to Vanguard Group in 2000.
The order allowed Vanguard “to offer certain index-based open-end management investment companies with mutual fund classes and exchange-traded classes,” the filing said. Relying on that and later exemptive orders, “Vanguard has become a major sponsor of index-based ETFs.” A patent obtained by Vanguard expired in May 2023.
“There are a lot of potential shareholder benefits to this structure and filing has enabled us to engage with a range of stakeholders and partners on how to best construct the framework around an ETF share class,” a Nuveen spokesperson said.
As of June 30, Nuveen had $1.2 trillion in assets under management. Nuveen currently offers 23 ETFs with about $9.2 billion in assets, according to the spokesperson.
