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Rating:A $204B-AUM AM Will Triple This Lineup Not Rated 0.0 Email Routing List Email & Route  Print Print
Thursday, April 18, 2024

A $204B-AUM AM Will Triple This Lineup

Reported by Neil Anderson, Managing Editor

The team at a $204-billion-AUM (as of March 31) active asset manager in Southern California are preparing to triple their ETF lineup while doubling that lineup's assets.

Jennifer Lisa Grancio
The TCW Group
Group Managing Director, Global Head of Distribution
Last week, the folks at TCW Group filed to launch their first six fixed income ETFs. Two of the ETFs will be newly created, while four will be converted from a $726-million-AUM quartet of existing traditional open-end TCW mutual funds. The six upcoming ETFs will be series of the TCW ETF Trust, and the TCW team has not yet revealed the planned ETFs' ticker symbols, expense ratios, or planned launch dates.

"We are excited to come to market with our first TCW branded fixed income ETFs, which is a natural extension of our distinguished fixed income business and existing ETF platform," states Jennifer Grancio, global head of distribution at TCW.

TCW already offers three actively managed equity ETFs with more than $717 million in combined AUM, as of yesterday (thanks to an acquisition last fall); the new launches and conversions would boost the firm's ETF lineup to nine ETFs in total with $1.443 billion in combined AUM.

The first of the two new ETFs will be the TCW AAA CLO Bond ETF ETF. Its porfolio manager team will include: Elizabeth Crawford, Palak Pathak, Pete Van Geldeen, and Bryan Whalen.

The second of the two new ETFs will be the TCW Multisector Credit Income ETF. Its portfolio management team will include: Jerry Cudzil, Brian Gelfand, Christopher Hays, Steven Purdy, and David Robbins.

The $46.89-million-AUM TCW High Yield Bond Fund, a series of TCW Funds, Inc., will convert into the new TCW High Yield Bond ETF. The fund's inception date was February 1, 1989, and it comes in I shares (TGHYX) for 55 basis points and N shares (TGHNX) for 80bps. The existing mutual fund's PM team includes: Cudzil, Gelfand, Stephen Kane, and Purdy. All the PMs except Kane will stay on with the new ETF.

The three other converting mutual funds are series of Metropolitan West Funds, with Metropolitan West Asset Management, LLC serving as investment advisor. Yet the converted funds will drop the MetWest brand. (TCW bought MetWest in 2010.)

The $348.67-million-AUM MetWest Flexible Income Fund will convert into the new TCW Flexible Income ETF. The existing mutual fund, whose inception was November 30, 2018, comes in I Shares (MWFEX) for 56bps and M shares (MWFSX) for 81bps. Its PM team includes: Cudzil, Ruben Hovhannisyan, Kane, and Whalen. All the PMs save Kane will stay on with the ETF.

The $305.52-million-AUM MetWest Floating Rate Income Fund will convert into the new TCW Senior Loan ETF. The existing mutual fund's inception was June 28, 2013, and it comes in three flavors: plan shares (MWFPX) for 61bps; I shares (MWFLX) for 71bps; and M shares (MWFRX) for 91bps. The ETF will keep the fund's PM team, which includes: Cudzil, Gelfand, Purdy, Drew Sweeney, and Kenneth Toshima.

The $24.94-million-AUM MetWest Investment Grade Credit Fund will transform into the new TCW Investment Grade Credit ETF. The existing mutual fund's inception was on June 29, 2018, and it comes in two flavors: I shares (MWIGX) for 50bps and M shares (MWISX) for 71bps. Its PM team includes: Cudzil, Hovhannisyan, Kane, and Whalen. All the PMs save Kane will stay on with the ETF.

TCW Investment Management Company LLC will serve as investment advisor to all the new and converted ETFs.

ACA's Foreside Financial Services, LLC will serve as the new and converted ETFs' distributor, and Foreside Fund Officers Services, LLC will provide a chief compliance officer, a principal financial officer, and a treasurer. In contast, the TCW Funds Distributors LLC serves as the converting mutual funds' distributor.

Paul Hastings LLP will serve as counsel for the new and converted ETFs, and it already serves as counsel for the converting mutual funds. Yet Dechert LLP also serves as counsel for the three converting MetWest funds, and Ropes & Gray LLP serves as counsel for TCW's three existing ETFs.

The TCW team has not yet revealed which exchange the six new and converting ETFs will list on. Their existing ETFs list on the Cboe.

The TCW team has also not yet revealed which provider (or providers) will serve as the new and converting ETFs' administrator, custodian, fund accountant, and transfer agent. Brown Brothers Harriman & Co. (BBH) fills all those roles for TCW's three existing ETFs. For the converting TCW mutual fund, State Street Bank and Trust Company serves as administrator, custodian, and securities lending agent, while U.S. Bank Global Fund Services serves as transfer agent. For the three converting MetWest ETFs, the Bank of New York Mellon serves as custodian while BNY Mellon Investment Serrvices (US) Inc. serves as administrator and transfer agent.

The TCW has also not yet revealed which independent accounting firm will suppot the new and converting ETFs. Cohen & Company, Ltd. serves in that capacity for TCW's three existing ETFs, while the Deloitte & Touche LLP does so for the four converting mutual funds. 

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