Pyxis, Highland Capital spinoff, takes over Highland’s active ETF ‘exemptive relief’ filing.
Pyxis Capital, the rebranded Dallas-based money management firm formerly known as Highland Funds Asset Management, filed updated regulatory paperwork requesting permission to offer actively managed ETFs under its new name. Pyxis spun off from Highland at the start of the year.
In the updated filing covering active ETFs, Pyxis stated that its initial fund will be a domestic fixed-income fund designed to provide a high level of current income, consistent with preservation of capital. The ETF will emphasize investments in floating-rate debt securities issued by companies with ratings published by a nationally recognized ratings agency as below investment grade.
It wasn’t immediately clear if a separate “exemptive relief” petition filed by Highland to gain permission to offer index ETFs was still in play, and whether Pyxis had taken that over as well.
Pyxis already offers about 20 open-end “mutual funds” and traditional closed-end funds, with more than $3 billion in retail assets under management. The company’s application to offer ETFs appears to be part of a major expansion drive. ETFs are a growing part of the investment universe, with total U.S.-listed assets now totaling almost $1.2 trillion. Pyxis more than doubled its products offering in 2011, the company said in a December 2011 press release.
The initial actively managed Pyxis ETF may use a “multimanager” approach to allocate portions of the fund to different subadvisors that employ distinct investment styles, and may select holdings for the ETF using model portfolios. The investment strategy outlined in the application also includes the possible use of proprietary techniques to adjust the portfolio for factors such as position size, industry and sector weights, and market capitalization.
In the petition covering index ETFs filed by Highland Funds, the company said it was planning an initial fund focused on senior loans. Officials at Pyxis weren’t immediately available to comment on that index ETF filing.
Highland first filed for passive as well as active exemptive relief in 2008.
An exemptive relief order from the SEC grants ETF firms exception to sections of the Investment Act of 1940, and is just the first step in the path to launching ETFs.