Nottingham Company has filed with the SEC to launch an Actively-Managed ETF which will look invest in US equities. Nottingham is the latest addition to an increasingly longer line of issuers that have expressed their interest in bringing Active ETFs to market or have filed to launch these products. Some of the big names that have entered the spotlight of late are JP Morgan, Eaton Vance, Legg Mason and RiverPark Advisors.
The Active ETF planned by Nottingham will be called the “Spinnaker FAS Managed Equity ETF”. The ETF’s investment advisor will be the FAS Capital Trust Company which is also part of the Rocky Mount, North Carolina based Nottingham Group. The ETF will look to invest at least 80% of the fund in attractively valued equities. The fund is also allowed to invest in foreign companies and may also invest up to 20% of the fund in preferred stocks, convertible bonds, options and warrants. The specific portfolio managers who will be making day-to-day investment decisions on the fund have yet to announced. The ETF will have total annual expenses of 0.65% which includes a management fee of 0.30%. A 0.65% expense ratio is about average when looking at Actively-Managed ETFs in general and in-fact cheaper than most when looking specifically at Active Equity ETFs.
Alongside all the interest that the sector has been getting, the SEC recently made a move that may well have the possibility of slowing down the growth in this space. The SEC announced that it will be deferring the approval of certain proposed ETFs that utilize swaps, futures and other derivatives to implement their investment mandate. The ETFs that are under review are mostly leveraged ETFs but may also include certain Actively-Managed ETFs. How much this ends up affecting the Active ETF space remains to be seen.
Disclosure: No positions in above-mentioned names.
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[...] 1. Nottingham Co. files for Spinnaker FAS Managed Equity ETF – direct link. [...]