Markets
ENV

Eaton Vance Postpones NextShares Launch Plan to 2016

Eaton Vance Corp.EV has postponed the launch of its ambitious NextShares funds to 2016, as the first-of-its-kind investment product is still awaiting final approval from the U.S. Securities and Exchange Commission ("SEC"). The company was reportedly aiming a launch by the end of 2015.

According to Kristine Delano, managing director of marketplace strategy at Navigate Fund Solution (a subsidiary of Eaton Vance that manages the NextShares funds), the SEC has suggested the company to incorporate visuals into its registration statements so as to "help investors input trades". Notably, the company is working toward the same.

Though SEC approval might come before 2015, Delano believes that the advancing holiday season will be an unfavorable environment for launch of its NextShares brand.

Moreover, initially, the company plans to bring only its own brand of NextShares funds on board, and thereafter intends a gradual launch of funds licensed by partner companies. This is different from the company's prior plans of launching all NextShares funds together.

What Makes NextShares Attractive?

NextShares is an exchange-traded managed fund ("ETMF"), a hybrid between traditional mutual fund and exchange-traded fund ("ETF"). First-of-its-kind funds developed by Eaton Vance to re-empower active asset management, these provide investors with benefits of passive management in the form of reduced expenses and increased transparency.

As such, the company remains highly ambitious regarding its invention. Moreover, it is likely to reap significant gains from the first-mover advantage.

Eaton Vance's Progress with NextShares

Eaton Vance has partnered with 11 fund companies to distribute the hybrid product, including Columbia Threadneedle Investments, Envestnet, Inc. ENV and Ivy Investment Management Company.

Further, in Sep 2015, the company managed to get its first broker-dealer partner in Folio Investing and Folio Institutional, which are offered by FOLIOfn Investments, Inc., a self-clearing broker-dealer. We believe Eaton Vance's progress with NextShares funds will put to rest analysts' concerns over the distribution of this hybrid product.

Moreover, we expect the company to enjoy a near-term monopoly in the space, since players like Precidian Investment, BlackRock Inc. BLK and State Street Corp. STT , among others, are still awaiting the initial SEC approval to offer this hybrid product.

Eaton Vance currently holds a Zacks Rank #4 (Sell).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days . Click to get this free report >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

STATE ST CORP (STT): Free Stock Analysis Report

BLACKROCK INC (BLK): Free Stock Analysis Report

EATON VANCE (EV): Free Stock Analysis Report

ENVESTNET INC (ENV): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

ENV STT BLK

Other Topics

Stocks

Latest Markets Videos

Zacks

Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

Learn More