Daily ETF Watch: A New Issuer Emerges

November 27, 2013

A new ETF sponsor comes forth with plans for active, quant-based funds.

Empowered Funds LLC, a newly formed Broomall, Pa.-based investment advisor, filed paperwork with regulators seeking permission to launch actively managed ETFs, the latest new sponsor to jump into an increasingly crowded field of ETF providers.

The firm’s initial proposed fund is dubbed the Empowered Funds Quantitative Value ETF, which will seek to invest in undervalued U.S. equities via a quantitative strategy. The algorithm-based quantitative approach seeks to identify characteristics of securities that, over time, result in superior investment returns than the general market, according to the filing.

With much of the pure beta market accounted for, passive and active issuers alike are increasingly turning toward so-called enhanced beta and active strategies to stake claims in unexplored pockets of the ETF world.

As things stand, BlackRock’s iShares, State Street Global Advisors and Vanguard together currently manage more than 80 percent of the $1.659 trillion now invested in U.S.-listed ETFs, according to data compiled by IndexUniverse. Active strategies, while gaining in popularity, account for less than 1 percent of that total, a measure of the challenge Empowered Funds faces.

The company didn’t reveal the proposed fund’s fees or ticker symbol.

There were no other filings or launches this morning.



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