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BREAKING NEWS: SEC to allow derivatives in active ETFs (AETFs) as predicted by Rob Ivanoff in the ETF Business Review for nearly 5 years; the fund industry is now on a NEW course in terms of distribution, economics, investing in ETF know-how

12/6/2012

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The big news are out: SEC will allow derivatives in active ETFs. This is a revolutionary development and it will serve as a catalyst behind the most amazing transformation of the fund business. (to read SEC's speech click here)

What does this mean for the fund industry? 
  • It means that the 30+ open-minded fund companies which have filed for active ETFs, are now free to launch active ETFs (AETFs) that can closely resemble their original strategies with derivatives, and transition managers into this new distribution wrapper/channel. Possibly, fund firms can elect to partner with a firm like AdvisorShares, which is interested in hiring sub-advisors.
  • It means that traditional fund companies, whom we begged to stay open-minded in terms of AETFs, will NOW have to invest in new distribution technology, ETFs know-how, and be part of economics that will revolutionize how fund products are bought, used, and managed.
  • For subscribers of the ETF Business Review, these news are nothing new. For the past two years, we at the leading authority in the fund industry, have been prepping for this moment, advising clients to consider active ETFs as yet another distribution channel for their existing strategies. We highlighted three key success factors: ability to deliver alpha, marketing scale, and human-based talent development (over indistinguishable shelf-products).
  • Last, consult your attorneys. The race is on, and this is a historical decision.
 
Atlas has un-shrugged. To join the ETF Business Review and sign here or contact me at rob.ivanoff@financialproductsresearch.com

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Rob Ivanoff: ProShares files for active ETFs

6/13/2012

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ProShares filed for active ETFs with SEC. The filing queries a broad permission for AETFs in stocks, bonds and currencies. In particular, the firm has detailed ProShares Emerging Market Debt ETF. Competition: WisdomTree has an emerging market debt AETF already on the market. The ELD has been one of the hottest entrants - but as of late, it has failed to pull new assets. It peaked at $1.1 billion late last year and it is expected to sit out 2012 flat, in lieu of collapsing Asian-growth story. Then, there are the passive EM debt ETFs. Despite all, ProShares is targeting a clever corner of the market. Packed with mystery, aka diversification possibilities -- EM debt is not frequented by bronco U.S. managers. Past studies have also shown, second-movers commonly match the net sales of first-entry offshoots. But roadblocks remain. Notably, late timing, until further details are disclosed. To read this filing please click here.  (Rob Ivanoff)
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Rob Ivanoff: Franklin Templeton files for active ETFs 

6/12/2012

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Franklin Templeton is the latest fund firm to file for an active ETF. The AETF will be very similar to PIMCO's MINT, and Guggenheim's GSY. The initial fund is named Franklin Templeton Short Duration Government ETF. Expense ratios were not disclosed. If ever launched, FPR believes the fund can actually generate around $100 million in AUM in short order - if there are no significant changes on the market by then. The current wait for active ETFs is 1-2 years. That is because SEC is mandated to take a gradual approach to allowing innovation. As per our report "12 Megatrends for the ETF Market 2012-2015" - FPR advises fund firms to think offensive, not defensive with AETF strategy. To get this report - click on our website and become a fund client of the ETF Business Review. Attached below is the filing - click on full screen to read it.
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