Fund Watch: Gotham, Transamerica, Highland, ALPS and More

In this edition of Fund Watch, we preview new fund filings from:

  • Eccles Street Event-Driven Opportunity ETF
  • Transamerica Event Driven Fund
  • ALPS Advanced Put Write Strategy ETF
  • Gotham Index 500 and Total Return Funds
  • Highland Files for 17 Alternative ETFs

Eccles Street Event-Driven Opportunity ETF

Eccles Street Asset Management filed paperwork with the Securities and Exchange Commission (SEC) on January 9, announcing its intention to launch the Eccles Street Event-Driven Opportunity ETF. Eccles Street will invest the fund’s assets in “event-driven” credit instruments, mostly corporate bonds and bank loans with an average maturity of 3-5 years. The instruments are considered “event-driven” because their issuers are involved in corporate “events,” such as mergers, acquisitions, bankruptcies, credit downgrades, proxy fights, or other restructuring.

The Eccles Street Event-Driven Opportunity ETF will also invest in equities, especially credit-related ETFs and ETNs. Investments will be selected after Eccles Street Management, the fund’s sub-advisor, performs a credit analysis of the issuers of potential investments. The fund’s objective will be current income, with a secondary objective of capital appreciation.

Transamerica Event Driven Fund

Transamerica Funds filed a Registration Statement with the SEC for the Transamerica Event-Driven Fund on January 15. The fund will be sub-advised by Advent Capital Management, and it will pursue an event-driven strategy by investing in companies involved in corporate events or special situations. Absolute return is the fund’s objective.

The Transamerica Event-Driven Fund will be available in A- and I-class shares, with net-expense ratios of 1.6% and 1.35%, respectively. Advent Capital Management’s Odell Lambroza, Tracy Maitland, and Doug Teresko are listed as the fund’s portfolio managers.

ALPS Advanced Put Write Strategy ETF

On January 6, ALPS ETF Trust filed a Form N-1A with the SEC announcing its plan to launch the ALPS Advanced Put Write Strategy ETF. The fund will seek total return, with an emphasis on income, by writing one-month put options on “SPY,” the SPDR ETF that tracks the S&P 500.

To write a put option is the same thing as short-selling a put option, and the ALPS Advanced Put Write Strategy ETF earns income by writing (short-selling) puts, effectively on the S&P 500. Put options rise in value as the value of their underlying instrument declines, and fall in value as their underlying instrument appreciates. The objective of a put writer is for the put contracts he or she sells short to expire worthless. The ALPS Advanced Put Write Strategy ETF will give investors the opportunity to earn income from unrealized fears as the S&P 500 climbs higher.

Gotham Index 500 and Total Return Funds

On January 15, Fundvantage Trust filed paperwork with the SEC for a pair of new alternative mutual funds: the Gotham Index 500 Plus Fund and the Gotham Total Return Fund. Author and former hedge-fund manager Joel Greenblatt is a co-portfolio manager of both funds.

The Gotham Index 500 Plus Fund seeks to outperform the S&P 500 over most investment periods by using a long/short equity strategy. In addition to shares of common stock, its investments may include preferred stock, convertible bonds, rights, and warrants – all of which are featured in portfolio manager Joel Greenblatt’s 1997 book You Can Be a Stock-Market Genius.

The Gotham Total Return Fund will be a non-diversified fund aiming to outperform the top-ranked university endowments over a full market cycle. Its assets will be allocated across other Gotham mutual funds, particularly the Gotham Absolute 500 Fund, the Gotham Enhanced 500 Fund, the Gotham Neutral Fund, and the new Gotham Index 500 Plus Fund. The fund’s long equity exposure is expected to be between 40% and 80%.

Highland Files for 17 Alternative ETFs

Highland Capital Management has made a big commitment to liquid alternatives space with a new filing for 17 ETFs that span across four broad hedge funds styles, including equity hedge, event driven, macro and relative value. The full list of funds is as follows:
  • Highland Equity Hedge Fundamental Growth ETF
  • Highland Equity Hedge Fundamental Value ETF
  • Highland Equity Hedge Multi-Strategy ETF
  • Highland Equity Hedge Technology ETF
  • Highland Equity Hedge Healthcare ETF
  • Highland Event-Driven Activist ETF
  • Highland Event-Driven Credit Arbitrage ETF
  • Highland Event-Driven Merger Arbitrage ETF
  • Highland Event-Driven Multi-Strategy ETF
  • Highland Macro Discretionary Thematic ETF
  • Highland Macro Multi-Strategy ETF
  • Highland Relative Value Fixed-Income Asset Backed ETF
  • Highland Relative Value Fixed-Income Convertible Arbitrage ETF
  • Highland Relative Value Fixed-Income Corporate ETF
  • Highland Relative Value Fixed-Income Sovereign ETF
  • Highland Relative Value Volatility ETF
  • Highland Relative Value Multi-Strategy ETF

Highland currently has one ETF in the market, the Highland iBoxx Senior Loan ETF, along with a range of alternative strategy and alternative income mutual funds. The launch of 17 alternative ETFs will make Highland one of the largest managers of alternative ETFs in the market.

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