Grail Advisors launched two actively managed bond ETFs today, as it makes its first move into the fixed-income market. The new funds are:

• Grail McDonnell Intermediate Municipal Bond ETF (NYSEArca: GMMB)
• Grail McDonnell Core Taxable Bond ETF (NYSEArca: GMTB)

The new ETFs will be managed by fixed-income specialist McDonnell Investment Management, which will have full discretionary power to select securities for the portfolios on a daily basis. The new funds will charge 0.35 percent in annual expenses.

The new funds are part of a broader push to launch actively managed ETFs into the market. Firms like Pimco and PowerShares have rolled out a number of actively managed bond funds, as they seek to steal market share from more established index-based ETF alternatives. Many investors believe that the fixed-income market is fertile ground for active managers, as the bond markets are illiquid and may be prone to mispricing.

While there are funds that compete directly with the new Grail offerings—Pimco, for instance, offers the actively managed Pimco Intermediate Municipal Bond Strategy Fund (NYSEArca: MUNI)—Grail sees its competition  more as actively managed mutual funds than competing ETFs. The firm believes that the advantages of the ETF structure, including lower costs and greater tax efficiency, will help it carve out market share from fund competitors.