Cambria Investment Management, the company that manages the ETF
firm AdvisorSharesâ most successful fund to date, filed paperwork
with the Securities and Exchange Commission to win the right to
market its own line of actively managed ETFs.
The first fund the in the works will be called the Cambria
Domestic Equity Strategy ETF, and it will invest in stocks and ETFs
that the advisor deems to be undervalued. The fund will use a
quantitative strategy to actively manage the portfolio.
The âexemptive reliefâ Cambria is seeking is aimed at
issuing transparent funds that would report their portfolio
holdings every day. All active ETFs now on the market operate with
such transparency, though companies like Eaton Vance and especially
iShares are pushing for the right to market nontransparent ETFs
that would only have to disclose holdings quarterly.
Cambria is no stranger to the world of ETFs. It serves as
advisor to the Cambria Global Tactical ETF (NYSEArca:GTAA), a fund
brought to market by Bethesda, Md.-based AdvisorShares in October
2010 that has gathered more than $170 million in assets. It is an
actively managed fund of funds that uses index ETFs to execute its
strategy of seeking exposure across many asset classes, including
equities, bonds, real estate, commodities and currencies.
In its paperwork seeking its own exemptive relief, El Segundo,
Calif.-based Cambria said future ETFs it is contemplating might
invest in open- or closed-end investment companies and/or ETFs.
âExemptive reliefâ grants firms exceptions to certain
sections of the Investment Company Act of 1940, and are the first
step companies must take to earn the right to market ETFs. It often
takes anywhere from six to nine months for a companyâs first ETF
to come to market after it has filed for exemptive relief.
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