OVERLAND PARK, Kan.--(BUSINESS WIRE)--Ivy NextShares, managed by Ivy Investment Management Company, a subsidiary of Waddell & Reed Financial, Inc., has filed a registration statement with the Securities & Exchange Commission to register three Ivy NextShares exchange-traded managed funds (NextShares). Ivy becomes the first fund sponsor to submit a filing to register NextShares since the first NextShares funds were launched by Eaton Vance Management, which obtained the initial exemptive order for NextShares, earlier this year.
The three Ivy NextShares, anticipated to launch by late summer this year, include:
- Ivy Focused Growth NextShares, which will invest primarily in a portfolio of common stocks issued by large capitalization, growth-oriented companies that the investment manager believes have the ability to sustain growth over the long term. The portfolio typically will maintain a limited number of stocks, generally 15 to 25. It will be managed by veteran portfolio managers Daniel P. Becker, senior vice president of Ivy Investment Management Co. (IICO), and Philip J. Sanders, senior vice president and Chief Investment Officer of IICO.
- Ivy Focused Value NextShares, which will invest primarily in the common stocks of companies that the investment manager believes are undervalued, trading at a significant discount relative to the intrinsic value of the company as estimated by IICO and/or are out of favor in the financial markets but have a favorable outlook for capital appreciation. The portfolio typically will maintain a limited number of stocks, generally 15 to 25. It will be managed by veteran portfolio manager Matthew T. Norris, senior vice president of IICO.
- Ivy Energy NextShares, which will invest at least 80% of its net assets in securities of companies within the energy sector, which includes all aspects of the energy industry, such as exploration, discovery, production, distribution or infrastructure of energy and/or alternative energy sources. The portfolio typically will hold 50 to 65 stocks. It will be managed by veteran portfolio manager David P. Ginther, senior vice president of IICO.
“Ivy NextShares is the latest step in our efforts to provide clients with unique, progressive investment products,” said Thomas W. Butch, executive vice president of IICO’s parent firm Waddell & Reed Financial, Inc. “Ivy NextShares offer the potential for competitive investment returns by applying the strength of Ivy’s experienced portfolio managers and proprietary investment research with a structure designed to provide cost savings. We are pleased to partner with NextShares Solutions as one of the first firms to seek to bring NextShares funds to market.”
NextShares are a new way to invest in actively managed strategies. Because they are actively managed, NextShares offer the potential for competitive investment returns by applying their managers’ proprietary investment research. Because they trade on an exchange, NextShares may offer cost and tax efficiencies that have the potential to enhance shareholder returns. NextShares may invest across all fund asset classes and are expected to be offered by a range of well-known asset managers.
“We congratulate the Ivy Funds for being among the first firms to bring NextShares to investors,” said Stephen W. Clarke, president of NextShares Solutions. “They are leading the evolution of active fund investing to a potentially better-performing, lower cost and more tax efficient structure.”
Ivy Funds obtained an exemptive order to operate NextShares in September 2015. The launch of Ivy NextShares is subject to listing and trading approvals from the Securities and Exchange Commission.
About Ivy Funds
Ivy Investment Management Company (IICO) is an affiliate of Waddell & Reed Financial, Inc. (NYSE: WDR). Through its subsidiaries, Waddell & Reed provides investment management and financial planning services to clients throughout the U.S. Waddell & Reed had approximately $104 billion in total assets under management at December 31, 2015. IICO serves as investment advisor to the Ivy Funds. For more information, visit www.ivyfunds.com.
About NextShares Solutions and Eaton Vance
NextShares Solutions LLC is a wholly owned subsidiary of Eaton Vance formed to develop and commercialize NextShares. Aspects of the operation of NextShares are protected intellectual property owned by NextShares Solutions.
Eaton Vance (NYSE: EV) is a leading global asset manager whose history dates to 1924. With offices in North America, Europe, Asia and Australia, Eaton Vance and its affiliates managed $315.1 billion in assets as of March 31, 2016, offering individuals and institutions a broad array of investment strategies and wealth management solutions. For more information, see eatonvance.com.
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THE INFORMATION IN THIS PRESS RELEASE IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION BECOMES EFFECTIVE. THIS PRESS RELEASE IS NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
The launch of Ivy NextShares funds by IICO is conditional upon regulatory approval, the likelihood and timing of which cannot be predicted. Commercial success also requires completion of enabling implementation technology and acceptance by market participants, which cannot be assured. Shares of NextShares funds are traded in the secondary market through a broker, and may not be individually purchased or redeemed from the fund. Buyers and sellers of shares normally transact with each other, rather than with the fund. These transactions do not affect the fund or its investments. When the fund does issue or redeem shares, the transactions are made through designated authorized participants and are normally in kind when practicable, meaning that the fund receives or delivers securities rather than cash. By transacting in kind, a NextShares fund can lower its trading costs and enhance fund tax efficiency by avoiding forced sales of securities to meet redemptions. As exchange-traded securities, NextShares can operate with low transfer agency expenses by utilizing the same highly efficient share processing system as used for exchange-listed stocks.
Market trading prices of NextShares are linked to the fund’s next-computed net asset value (NAV) and will vary from NAV by a market-determined premium or discount, which may be zero. Buyers and seller of NextShares will not know the value of their purchases and sales until after the fund’s NAV is determined at the end of the trading day. Market trading prices may vary significantly from anticipated levels. NextShares do not offer investors the opportunity to buy and sell intraday based on current (versus end-of-day) determinations of fund value. NextShares trade execution prices will fluctuate based on changes in NAV. Although limit orders may be used to control trading costs, they cannot be used to control or limit trade execution prices. As a new type of fund, NextShares do not have an operating history and may initially be available through a limited number of brokers. There can be no guarantee that an active trading market for NextShares will develop or be maintained, or that their listing will continue unchanged. Buying and selling NextShares may require payment of brokerage commissions and expose transacting shareholders to other trading costs. Frequent trading may detract from realized investment returns. The return on a shareholder’s NextShares investment will be reduced if the shareholder sells shares at a greater discount or narrower premium to NAV than he or she acquired the shares. NextShares funds issue and redeem shares only in specified creation unit quantities in transactions by or through authorized participants. In such transactions, a fund issues and redeems shares in exchange for the basket of securities, other instruments and/or cash that the fund specifies each business day. The basket is not intended to be representative of the fund’s current portfolio positions and may vary significantly from current positions.
NextSharesTM is a trademark of NextShares Solutions LLC. Used with permission.
All investments are subject to risks, including possible loss of principal. Please consider the investment objectives, risk, charges and expenses of Ivy NextShares before investing. Please carefully read a copy of the Ivy NextShares prospectus or summary prospectus before investing, which contains this and other information about Ivy NextShares; you can obtain a copy of the prospectus or summary prospectus by calling 800-532-2780.