NEW YORK--(BUSINESS WIRE)--The ETF Industry Exposure & Financial Services ETF (NYSE Arca: TETF), will begin trading today, April 20, 2017, providing investors with a single point of access to the companies driving and participating in the growth of the Exchange Traded Funds industry.
TETF will seek to track, before fees and expenses, the price and yield performance of the Toroso ETF Industry Index (the Index), which is designed to provide exposure to the publicly traded companies that derive revenue from the ETF industry. This includes ETF sponsors, index and data companies, trading and custody providers, liquidity providers, and exchanges.
ETFs and the industry have experienced significant growth over the past five years, as their assets have grown in the U.S. from $1.2 trillion to $2.7 trillion; the number of U.S. ETF sponsors has increased from 45 to 78; and the average ownership of U.S. equities by ETFs has more than tripled. 1
The Index is overseen by an Index Committee made up of industry veterans, including Mike Venuto, CIO of Toroso Investments; Guillermo Trias, CEO of Toroso Investments; Linda Zhang, Founder of Purview Investments; Kris Monaco, Founder of Level ETF Ventures; and Kevin Carter, Founder of Big Tree Capital. This group has decades of ETF industry experience covering a range of functions including index creation, ETF portfolio construction, investment management, distribution, research, trading and more.
“Not only are we seeking to capture the performance of the industry, but we’re also looking to bring together many of its leaders to leverage their authority as we monitor, research, and benchmark the category’s potential future growth,” said Trias, who created the concept and the idea behind the ETF.
“We have deep roots in the ETF ecosystem and have created an Index that captures the dynamism of ETFs and the disruptive innovation they have brought to the financial services industry,” said Venuto.
“Clearly, investors and advisors now understand the benefits of the ETF structure, including improved liquidity, tax efficiency, and increased transparency. But while they’ve been able to incorporate those benefits into their portfolios, they have not had opportunities to participate in the growth of the ETF industry itself. That is an issue we’ve solved with the launch of the Toroso ETF Industry Index and TETF,” Venuto said.
The Index, maintained by Solactive AG, is designed with four tiers of constituents:
- Tier 1, 50% of the Index’s exposure, is made up of companies with substantial participation in the ETF industry, providing direct financial impact to shareholders, including BlackRock, Charles Schwab, Invesco, State Street, WisdomTree, and more.
- Tier 2, 25% of the index’s exposure, is made up of companies with substantial participation in the ETF industry, providing indirect financial impact to shareholders, including KCG Holdings, NASDAQ, Intercontinental Exchange, Inc., and more.
- Tier 3, 15% of the Index’s exposure, is made up of those companies with moderate levels of participation in industry, including Bank of New York Mellon, US Bancorp, FactSet, Ameriprise Financial, and more.
- Tier 4, approximately 10% of the Index’s exposure, includes companies that are new or participating in a smaller way in the ETF industry relative to their overall focus, and includes such names as Morningstar, Eaton Vance, Goldman Sachs, Legg Mason, Citigroup, and more.
“The ETF industry is more than just a list of fund sponsors, and this Index is designed to include the full range of participants,” continued Venuto. “It is also aimed toward capturing not only the established leaders in each area, but also those firms that might be new to the space but which are bringing exciting approaches that could resonate with investors and drive further growth of the industry itself.”
The Toroso ETF Industry Index has been licensed to Exchange Traded Concepts, the advisor to TETF. The fund begins trading on April 20th on the NYSE and will be the first ETF to provide this type of targeted exposure to the universe of companies participating in the growth of the Exchange Traded Fund category.
About Toroso Investments®
Founded in 2012, Toroso Investments, LLC is an asset management and research firm doing business as Toroso Asset Management, dedicated to researching, managing and launching strategies within the expanding ETF universe; and a consulting platform doing business as Tidal Growth Consultants, dedicated to unlocking the growth potential of other RIAs and ETF issuers.
Launched by a group of finance thought leaders who have been designing, marketing, distributing, and utilizing ETFs for years, Toroso is now leading the sector with unparalleled ETF expertise and an analytical platform that is leveraged for servicing investors, Financial Advisors and ETF issuers around the world.
About Exchange Traded Concepts
Exchange Traded Concepts is the leading turnkey ETP platform that provides time-sensitive and cost-effective methods to bring an exchange-traded fund to market. Seasoned ETF professionals have the operational and regulatory experience plus the industry expertise required to navigate the complexities of launching and managing an ETF. ETC has developed strategic relationships with other ETF service providers to assist ETC’s sub-advisors in navigating the exchange-traded fund launch process with the guidance necessary to maintain regulatory compliance. With more than 30 fund launches and more than $2.6 billion in AUM, ETC continues to innovate and expand the ETF universe.
There are risks involved with investing, including possible loss of principal. The Fund’s assets will be concentrated in the financial services sector, which means the Fund will be more affected by the performance of the financial services sector than a fund that is more diversified. Companies engaged in ETF Activities could be adversely affected if the current growth of the ETF market is not sustained. The Fund’s return may not match or achieve a high degree of correlation with the return of the Index. The Fund is non-diversified.
There is no guarantee the fund will achieve its stated objective.
To determine if the fund is an appropriate investment for you, carefully consider the fund’s investment objectives, risk, and charges and expenses. This and other information can be found in the fund’s prospectus, which can be obtained by calling 844-380-TETF (8383) or by visiting (www.tetfetf.com). Please read the prospectus carefully before investing.
Exchange Traded Concepts, LLC serves as the investment advisor, and Penserra Capital Management LLC serves as a sub advisor to the fund. The Funds are distributed by SEI Investments Distribution Co. (1 Freedom Valley Drive, Oaks, PA, 19456), which is not affiliated with Exchange Traded Concepts, LLC or any of its affiliates.
1 ETF.com and Toroso Investments, LLC