Legg Mason Turns to Debt ETFs With Equity Funds in SEC Limbo

Legg Mason Inc. has a proactive approach to regulatory uncertainty: move onto something else.

The $754 billion asset manager is considering starting its first debt-focused exchange-traded fund as it waits for news from the Securities and Exchange Commission on whether an innovative structure it wants to use for equity ETFs can go ahead. The debt fund will start in the first half of next year — pending a nod from regulators, according to Tim Gilligan, an ETF product specialist at the money manager.

Legg Mason is expanding its ETF business as investors shift more money away from mutual funds and ...