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First Trust Files For Hedge Fund ETF, Pyxis Plans Actively-Managed Fund

Stoyan Bojinov

By Stoyan Bojinov:

The product development front was a bit quiet this week as Van Eck was the only issuer to beef up its lineup with a new high yield bond ETF. First Trust also laid down the groundwork for a hedge fund ETF and newcomer Pyxis is planning to debut its first actively-managed offering.

First Trust, the issuer behind the AlphaDEX family of products, filed plans with the SEC to bring to market a hedge fund ETF (see SEC filing):

  • First Trust Hedge Fund Manager Holdings Index Fund: This ETF will seek to replicate the price and yield performance of the Wells Fargo Hedge Fund Manager Holdings Index. The underlying index is designed to measure the performance of the 100 largest positions in equities and equity-related securities that are held by hedge funds according to quarterly SEC filings. The basket of holdings may consist of common stock, equity options, closed-end funds, convertible debt, as well as ETFs.

The issuer did not disclose a trading ticker or expense information.

Dallas-based Pyxis Capital, formerly known as Highland Funds Asset Management, is gearing up to debut its first product to market. The firm currently offers an extensive lineup of open-end mutual funds, although its filing with the SEC showcases the growing trend of money managers expanding into the ETF space. Pyxis filed with the SEC requesting “exemptive relief," which would give the issuer permission to offer its first actively-managed ETF (see SEC filing).

The proposed Pyxis fund will look to employ a “multimanager” approach - this simply means that the underlying portfolio will be divided among subadvisors who will utilize a variety of different investment strategies. This ETF will be designed to provide a high level of current income through a portfolio domestic fixed-income securities. Holdings will consist of floating-rate debt note issued by companies with below investment grade credit ratings.

Disclosure: No positions at time of writing.

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