New Fund-Of-Funds Global ETF Proposed

August 07, 2009

New global fund-of-funds is being proposed by a Reno, Nev.-based advisory shop.


A new fund-of-funds is being proposed by a new entrant into the exchange-traded funds market.

The ETF would be run by a trust established by U.S. One Inc. of Reno, Nev. According to a recently filed request to the Securities and Exchange Commission, the ETF would invest in a number of different ETFs covering international as well as domestic stocks.

No details about specific funds to be used were included in the filing. But it did say that the adviser will use a long-term-oriented, buy-and-hold strategy.

“The adviser employs an asset allocation strategy focused on increasing shareholder return and reducing risk through exposure to a variety of domestic and foreign market segments. The adviser selects underlying ETFs based on their ability to accurately represent the underlying stock market to which the adviser seeks exposure for the fund. Additionally, the adviser seeks to maintain a low after-tax cost structure for the fund and, therefore, also evaluates ETFs based on their underlying costs,” said U.S. One.

The document added: “The adviser employs a buy and hold strategy, meaning that it buys and holds securities for a long period of time, with minimal portfolio turnover.”

It might be worth noting that no mention of an index that the fund-of-funds ETF would seek to follow was made. The expected expense ratio of such an ETF also shows that the adviser would comprise the bulk of expenses. Some 0.35% of the proposed ETF’s total expense ratio of 0.46% would go to pay U.S. One for its advisory services.

The company lists Paul Hrabal as its president and characterizes him as the primary manager who would be handling daily management of the ETF’s portfolio.

Hrabal founded the advisory firm last year. Before that, he was president of U.S. Data Trust Corp., which “provides data backup and disaster recovery services for small- to mid-sized businesses,” according to the filing.

You can read the SEC document here.



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