New York RIA Plans Resource-Scarcity ETF

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January 08, 2013
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A New York registered investment advisor hopes to market a multi-asset active ETF designed to profit from resource scarcity.

Artivest Advisers LLC, a New York-based registered investment advisor, filed regulatory paperwork late last month to gain permission to offer active ETFs, the first of which would be a long-short strategy combining stocks and bonds with returns linked to global natural resource scarcity.

The “exemptive relief” filing detailed what the company has tentatively called the Commodities Supercycle Artivest Trust ETF, and the company said it is also seeking permission to offer a broad array other ETFs as well, including securities focused on U.S. and global stocks and bonds as well as various blends of different asset classes.

“The Initial Fund will pursue an active strategy of primarily taking long and short positions in equity and fixed income securities whose performance is driven in part by commodity price movements, taking into account price trends that result from global natural resource scarcity,” the filing said.

While commodities investing using different asset classes has become increasingly popular in recent years—in part because of perceived tightness as countries like China and Brazil develop rapidly—the wording in the Artivest filing suggests the firm’s ETF might be the first that’s explicitly designed to profit from actual scarcity of raw materials.

The filing also said the Supercycle Artivest Trust ETF would use other types of securities to achieve its investment objective, including derivatives, making Artivest one of the first ETF issuers to take advantage of the Securities and Exchange Commission’s recent decision to again allow derivatives in new ETFs.

Exemptive relief grants ETF firms exception to sections of the Investment Act of 1940 and is just the first step in the path to launching ETFs. It often takes at least six to 12 months from the date of the initial filing for a company’s first ETF to hit the market.

 

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