Olney, M.D.-based Arrow Investments is looking to add active exchange-traded funds and more alternative mutual funds to its quiver.

CEO Joseph Barrato told Money Management Executive that the firm is hoping to launch one ETF focusing on yield and another alternative-type strategy by Q1 2013. The firm filed for exemptive relief last fall and received its exemption from the Securities and Exchange Commission on July 3. “We’ve looked to see where the potholes are in terms of where the SEC has been slowing the active filing,” said Barrato.

“Obviously, the biggest one is derivatives so if you put derivatives in your filing, you’re not going to get approval because they’ve made it pretty clear that they’re not going to do that. My goal is to move through this as quickly as we can. If we can register something by the end of this month, we’re hoping by early next year we can have a product out.”

He declined to further comment on the firm’s active ETF initiative.

On the mutual fund front, Barrato said that the firm is working with an investment advisor to build a dynamic strategy “that has a little more flexibility in terms of how it moves in and out of asset classes.”

“We’ve seen the blowup of alternatives on the fund side over the last 10 years but we think there are a couple of missing gaps there,” he added.

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