New Firm Rises From Ashes Of FaithShares

July 18, 2011

FaithShares will cease to exist, but in its place is a firm that plans to help clients bring ETFs to market.

FaithShares and its final fund are passing into history, but the firm’s co-founder and top executive Garrett Stevens is behind a new company that will offer clients a quick and cheap way to bring index equity ETFs to market. The new firm said it will file for the first funds in the coming weeks.

The new firm, Oklahoma City-based Exchange Traded Concepts, will offer up its regulatory permission to market ETFs via a service called “ETF-In-A-Box.” The service could cut the time it takes to launch an ETF to 75 days from the one to three years it can take without the service, and could shave up to $1 million from the cost of a launch, the new company said in a press release and on its website.

The service appears similar to the role AdvisorShares plays in the active ETF space, bringing sundry strategies to market with different subadvisors, except that unlike AdvisorShares, the ETFs Exchange Traded Concepts helps bring to market will be index strategies and never include the firm’s name. It didn’t disclose financial terms for the service.

The company said it will make available to its clients the “exemptive relief” it earned in 2009.  Exchange Traded Concepts will make use of FaithShares’ exemptive relief, and the supplement to the prospectus and statement of additional information of the company’s five original funds also said that FaithShares had changed its name to Exchange Traded Concepts.

Additionally, the supplement said the last remaining FaithShares ETF, the FaithShares Christian Values Fund (NYSEArca: FOC), will be liquidated on Aug. 31. The company said in June it was shuttering four Christian-faith-specific strategies.

Exchange Traded Concepts currently has regulatory approvals to offer passively managed domestic and international equity funds, but “in the immediate future” plans to file with the Securities and Exchange Commission for additional exemptive relief that would allow it to market active and fixed-income ETFs, according to the press release.

“It currently takes between 12 and 36 months to receive the necessary regulatory approvals to establish a new ETF family,” Stevens said in the press release. “First mover advantage in ETFs has proven critical in capturing market share, and this loss of time could represent the difference between a successful launch and a missed opportunity.”

Exchange Traded Concepts is focused solely on private-label ETFs, allowing subadvisors to bring investment ideas to market under their own brands.

Stevens was the chief executive of FaithShares for three years after helping to found it in 2009.

 

 

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