U.S. Bancorp Fund Services has launched its first multiple series trust focused on exchange-traded funds in a partnership with Exchange Traded Concepts, an advisor that helps money managers launch their own private label ETF-products.
AlphaClone, LLC and Zacks Investment Research will be the first two managers operating in this new exchange-traded trust, called ETF Series Solutions.
“This new MST and partnership with Exchange Traded Concepts help make entering the ETF market incredibly easy for investment managers,” said Joe Redwine, president of U.S. Bancorp Fund Services. “We continuously strive to find new ways to help our clients focus on investing while capitalizing on developments in the market. Our new MST continues that tradition.”
A multiple series trust allows money managers to share many of the administrative costs related to launching and operating a mutual fund, while allowing them to focus on managing the fund’s investment strategies.
Each trust is an open-ended management investment company registered with the Securities and Exchange Commission. Each also acts as a series fund, which has the power to create an unlimited number of series, or separate portfolios each with their own assets, liabilities and shareholders. Each of these portfolios is operated independently, with its own brand name, prospectus and shareholder reports.
Moreover, each fund is responsible for fund-specific expenses, but the other expenses, like general legal services, Board of Trustee costs, insurance and the trust’s chief compliance officer, are shared by all the funds within the trust.
In the case of ETF Series Solutions, managers will also be able to take advantage of the ETF-specific platform operated by Exchange Traded Concepts, which will provide the back office operations for launching and administering the funds.
“Our partnership with US Bancorp Fund Services broadens our ability to help third-party investment managers bring an ETF to market quickly and cost-effectively,” said Garrett Stevens, chief executive officer of ETC. “Given their long-standing history in the mutual fund market and strong financial background, we are excited to partner with U.S. Bancorp Fund Services to help launch this MST and we anticipate seeing more innovative ETF strategies come to market as a result.”
ETF Series Solutions is the fifth series trust for U.S. Bancorp and the second for Exchange Traded Concepts.
The Oklahoma City-based Exchange Traded Concepts is an ETF-incubator which works with money managers to launch their own exchange-traded products. It was rebuilt in July 2011 from the ashes of the Christian-based ETF manager FaithShares.
In addition to advisory services, Exchange Traded Concepts also offers a turnkey platform called ETF-in-a-Box that, according to the company, can help managers launch an ETF in as little as 75 days. By way of this system, the company helped Sustainable Wealth management launch an ETF that tracks the Sustainable North American Oil Sands Index.
In December, the incubator helped Yorkville ETF Advisors launch the Yorkville High Income MLP ETF, which targets master limited partnership specializing in the production and transportation of natural resources.
Tommy Fernandez writes for Money Management Executive.