FFCM LLC, a new player to the ETF industry, is filing paperwork necessary to offer its own line of active and indexed ETFs. The initial filing states that two of the Initial Funds are Index Funds employing the same types of investment strategies as conventional index funds. One Initial Fund is an Active Fund. Active Funds will make the same types of investments as described below; however, they will not seek to match the daily performance of an Underlying Index. Because the Index Funds will provide the same level of transparency as Prior ETFs based on indexes (including full portfolio transparency with respect to 130/30 Funds) and Active Funds will be fully transparent like Prior ETFs that employ active management, and because all Funds will be traded on an Exchange like all Prior ETFs, Applicants believe that the Funds will offer market participants comparable arbitrage opportunities.
Each index-based Fund (“Index Fund”) will have a distinct investment objective. More specifically, each Index Fund, on a daily basis, will seek to achieve, before fees and expenses, the daily performance of a particular index (“Underlying Index”). Underlying Indexes include: any domestic equity, foreign equity and fixed income indexes (respectively, a “Domestic Index,” “Foreign Index” and “Fixed Income Index”).6 Index Funds investing in Domestic Indexes are “Domestic Index Funds.” Index Funds investing in Foreign Indexes are “Foreign Index Funds.” Index Funds investing in Fixed Income Indexes are “Fixed Income Index Funds.”
The Initial Active Fund will invest primarily in domestic equity securities, including Index Funds’ ETS, and Financial Instruments. The investment objective of the Initial Active Fund will be to outperform a well known hedge fund benchmark such as the Credit Suisse/Tremont Global Macro Index.
For the full filing click: HERE
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