An innovation has come to Nasdaq’s market: Actively managed ETF share classes of mutual funds began trading on Nasdaq last month, with Thornburg Investment Management (“Thornburg”) among the first asset managers to bring this structure to the exchange.
Thornburg launched ETF share classes for two of its actively managed mutual funds — the Thornburg American Opportunities Fund (TAOZ) and the Thornburg Focus Growth Fund (TFGZ). The news follows F/m Investments’ launch in March of a mutual fund share class for its flagship Nasdaq-listed ETF, TBIL, creating a dual-share-class structure that lets investors hold the same underlying 3-month Treasury bill strategy across brokerage and retirement accounts.
Thornburg’s listing marks the first time an actively managed dual-share-class structure has been listed on Nasdaq and is among the earliest adoptions industry-wide since the SEC broadened access to the model last year.
The structure allows a single underlying portfolio to be accessed as both a mutual fund and an ETF. Thornburg received share-class exemptive relief from the SEC for these products earlier this year, after Vanguard’s patent on the approach expired. What sets the Thornburg launches apart from prior adoptions of the dual-share-class structure is their active management: Both TAOZ and TFGZ are run by portfolio managers making daily decisions rather than tracking a passive index.
“Extending these mutual funds into ETF share classes underscores our commitment to meeting evolving client demand with actively managed, high-conviction strategies grounded in fundamental research,” said Thornburg CEO Mark Zinkula.
According to Gabrielle Vennitti, Nasdaq’s Head of ETF Listings, the practical benefit of these new share classes is flexibility. Until now, someone using a Thornburg mutual fund strategy in a retirement account and an ETF in a brokerage account would be managing two separate products. The dual-share-class structure reduces friction, allowing advisors and investors to access the same strategy regardless of account type.
“As active ETFs have really grown across the board, we see the first active mutual fund share class ETF launching on Nasdaq as a really important step forward for the ecosystem and for product innovation,” Vennitti said.
“Portfolio managers are making tactical decisions, they’re reacting to market changes… there’s just a greater potential for alpha overall, which means there’s just a potential that it might generate better returns,” she added. “It really allows us to reach new kinds of investors that are typically only looking for a mutual fund or only looking for an ETF to see this new product as a new home.”
Nasdaq worked closely with Thornburg on the launch, helping the firm meet its timelines and ensuring the new share classes could begin trading as smoothly as possible.
“Getting to be a first mover on Nasdaq was really attractive for Thornburg,” Vennitti explained.
The collaboration reflects Nasdaq’s broader approach to ETF listings, working directly with issuers to anticipate and respond to evolving product needs, from the initial launch-day experience to ongoing reporting and data support.
“We’re pleased to have partnered with Nasdaq on this innovative dual-share-class launch. Their strong client focus and attention to detail made them a natural fit for bringing these ETFs to market.”
Vennitti said she expects the dual-share-class model to attract additional issuers throughout the year. Some firms are positioned to move quickly; others are working through operational considerations before filing.
She also noted that the structure is drawing interest from traditional mutual fund managers who have not previously offered ETFs, giving them a path into the ETF market while retaining their existing mutual fund investors.
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