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Founded in 2012, ETF Issuer Solutions (ETFis) is a turnkey platform available for investment manager looking to launch new exchange traded funds (ETFs), but don’t want to create and manage their own ETF infrastructure. Currently, the firm has three exchange traded funds (ETFs) on the market and seven more in registration with the Securities and Exchange Commission (SEC), all of which are, or will be, managed by external sub-advisors. All of this looked appealing to Virtus Investment Partners who yesterday announced an agreement to acquire a majority interest in the firm, in a deal expected to close in March. Active and Passive ETF Platform According to a statement from Virtus, the transaction will add to Virtus’s product lineup by improving its “manufacturing capabilities” for both active and passive ETFs. Currently, Virtus has two alternative mutual funds in registration: The Virtus Long/Short Equity Fund and the Virtus Multi-Strategy Target Return Fund, both of which had paperwork filed on January 22. ETFis will become a Virtus affiliate and continue to operate as a multi-manager ETF platform. ETFis’s co-founders Matthew B. Brown and William J. Smalley will stay on with the firm. Currently, Mr. Brown is ETFis’s head of operations and technology capabilities, and Mr. Smalley is the firm’s head of product strategy and management. Said Mr. Smalley: We developed ETF Issuer Solutions to provide a technology-driven, ETF-specific platform that offers significant cost and operational efficiencies. The partnership with Virtus gives us the resources and support to execute on our long-term vision of building a leading multi-manager ETF platform. Focus on External Sub-Advisors All of ETFis’s ETFs, including the seven yet to launch, have external sub-advisers. The firm’s current products include the InfraCap MLP ETF (NYSEARCA: AMZA ), sub-advised by Infrastructure Capital Advisors; and the BioShares Biotechnology Products ETF (NASDAQ: BBP ) and BioShares Biotechnology Clinical Trials ETF (NASDAQ: BBC ), both of which are sub-advised by LifeSci Index Partners. ETFis’s products currently in registration with the SEC include: The Newfleet Multi-Sector Unconstrained Bond ETF; The Eccles Street Event Driven Opportunities ETF; The Tuttle Tactical Management U.S. Core ETF; The InfraCap REIT Preferred ETF; and The Manna Core Equity Enhanced Dividend Stream Fund. Of these, the Newfleet Multi-Sector Unconstrained Bond ETF will be the first managed by a Virtus affiliate added to ETFis’s platform. The fund is to be sub-advised by the experienced team at Newfleet Asset Management and will “have the flexibility to capitalize on opportunities across all sectors of the bond markets.” The fund’s paperwork was filed with the SEC on January 26. Said George Aylward, Virtus CEO: There is growing interest among financial advisors and investors to use exchange-traded funds in their retail and institutional portfolios because of the tax efficiency and liquidity benefits that ETFs offer. This partnership with ETFis will expand our product capabilities and allow us to offer compelling investment strategies in an actively managed ETF format. Scalper1 News
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