Daily ETF Watch: Reality Shares Debut Near

A new ETF provider is on the verge of launching an active fund targeting dividend-rich stocks in the developed world.

Managing Editor
Reviewed by: Olly Ludwig
Edited by: Olly Ludwig

Reality Shares Advisors, a new ETF brand created by San Diego-based ERNY Financial Advisors, is close to launching its first fund, an actively managed strategy called the Reality Shares DIVS ETF, according to regulatory paperwork the firm filed this week.

The dynamic ETF industry remains rife with intrepid entrepreneurs keen on getting a piece of the action. To be sure, the barriers to success are quite real—an astonishing 85 percent of the nearly $2 trillion now invested in ETFs are controlled by the four biggest ETF providers, according to data compiled by ETF.com. That said, there’s little doubt that smaller crafty firms have been able to carve out niches.

Reality Shares’ ambitions have been gestating for almost 18 months. It first filed for permission to market the Reality Shares brand of ETFs in April 2013 in both active and index wrappers. It filed its first registration statement about a year ago, detailing plans for three dividend-focused ETF.

The fund that’s near launch is an actively managed fund that will mine the developed world for dividend-rich large-capitalization equities in the U.S., Europe and Japan, according to the updated prospectus filed earlier this month detailing the fund’s strategy. To be sure, dividend-focused strategies are rather popular these days, given the low bond yields that have prevailed since the subprime mortgage crisis sparked a near economic collapse about six years ago.

The prospectus said the fund will trade with the ticker “DIVY” and will come with an annual expense ratio of 85 basis points, or $85 for each $10,000 invested.

The fund will have its primary listing on NYSE Arca, the prospectus said.

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Olly Ludwig is the former managing editor of etf.com. Previously, he was a financial advisor at Morgan Stanley Smith Barney and an editor at Bloomberg News. Before that, Ludwig was a journalist at the Reuters News Agency in New York.