Grail Advisors is requesting approval from the Securities and Exchange Commission to launch two new stock exchange-traded funds, both of which are designed to press a more active mandate than currently on the market. 

In a filing dated Jan. 14, the San Francisco-based asset manager proposes creation of the Grail American Beacon Large Cap Value ETF and the Grail American Beacon International Equity ETF. Neither would follow an index and both portfolios would be subadvised by longtime mutual fund manager American Beacon.

Grail says it hasn't been determined yet whether American Beacon will use its own analysts and managers or hire additional outside subadvisors to the funds.

Regardless of the management team involved, the new funds won't carry any restrictions on trading. That would put it in the same ballpark as the PowerShares Active Mega Cap (NYSE: PMA). Its portfolio is run by the firm's parent, London-based asset manager Invesco, through a team of institutional fund managers.

PMA theoretically can trade at any time. But PowerShares has said that it anticipates the fund executing trades only on a monthly basis over the longer term. It came on the market with two other active PowerShares equity ETFs on April 11, 2008. (See related article here.)

In November, PowerShares added to its active stock ETF family with a U.S. real estate focused portfolio. (See related story here.) 

Whether the new Grail-sponsored ETFs will wind up trading as much as their flexible mandates allow is still to be determined. The company says target ranges for turnover rates for each fund will be addressed in the future as specific managers are selected and investment strategies are formalized.

Carte Blanche 

But its chief executive, Bill Thomas, said in an interview on Thursday that whatever set of multi-managers is used, they'll have complete freedom.

"This is going to be more like what investors are used to seeing in actively managed mutual funds, except with complete daily transparency," he said. 

Instead of seeking to replicate the performance of a particular index, the filing says that "each fund will pursue its investment objective by investing in liquid securities" preferred by managers based on fundamental analysis and related research.

There's no mention of quant-based strategies as is the case with the existing PowerShares stock ETFs being marketed now as actively managed. PMA is based on a quantitatively managed screening process, although it has an overlay that includes fundamental analysis. It can also use derivatives and other futures contracts and has ample freedom in handling cash. 

The three other PowerShares stock ETFs with "active" in their names are restricted to trading weekly and use quant-based methodologies.

Thomas acknowledges that Grail isn't alone in its pursuit of true active management, saying "we've looked at all the filings out there."

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