The first family of actively managed exchange-traded funds (ETFs) designed to give investors exposure to major multi-factor political, economic, and policy-driven events and themes was introduced today by EventShares.
The two flagship ETFs – the EventShares Republican Policies Fund (BATS: GOP) and the EventShares Democratic Policies Fund (BATS: DEMS) – seek to construct portfolios expected to be positively affected by each respective party’s policies. Both seek to provide capital appreciation by unlocking value from policy-driven events and themes. Neither fund seeks to replicate the performance of a specific index.
“As we have seen in dramatic fashion since last year’s U.S. presidential election, government policies can have a significant impact on the markets in both the short and the longer-term,” said Ben Phillips, Chief Investment Officer at EventShares. “Our funds are the first to provide a broad-based vehicle for investing in these themes as embodied by the policies of the two major American political parties, which often have divergent views on healthcare, infrastructure, and defense, among other areas. Our research looks to identify winners and losers on a company-level, based on specific policy outcomes, and to build portfolios accordingly.”
The EventShares research process includes both a qualitative component that reviews current and prospective policy initiatives and their potential impact on specific sectors and stocks, and a quantitative process that screens for a set of proprietary metrics used to define the investable universe and manage portfolio risk. Based on this process, positions in the funds’ portfolio holdings are re-positioned quarterly.
Tactical Tax Policy ETF also launched
In addition to GOP and DEMS, EventShares is also launching a new tactical fund, the EventShares U.S. Tax Reform Fund (TAXR). TAXR seeks to provide exposure to those companies that are poised to see the greatest benefit from the implementation of significant tax reform in the U.S. The company may introduce additional tactical ETFs going forward. Past examples of tactical situations around which an EventShares fund might have been constructed include the Dodd-Frank legislation, Obamacare, Quantitative Easing, and Abenomics.
All EventShares funds may invest in both equity and debt securities, without geographic limits. The funds have the ability to combine asset classes and market exposures opportunistically, managed based on policy-driven events and themes. In addition, the funds may hold both “short” and “long” positions in securities the manager believes will be impacted by specific policies and political events. The funds will generally hold 30-75 positions in the portfolio and be equally weighted.
“ETFs provide a great vehicle for investors who may want transparent, low-cost exposure to the potential impact of specific policies,” said Phillips. “Adding the active component allows us to manage the funds dynamically, in keeping with constantly changing fortunes of the political parties, and rapidly evolving global events.”
EventShares is a family of thematic, active Exchange Traded Funds (ETFs) managed by Active Weighting Advisors LLC, an independent asset manager headquartered in New York City. The firm seeks to build a disruptive family of first-of-their-kind ETFs offering exposure to geopolitical and policy-driven events in the U.S. and around the world.
For more information, visit www.eventshares.com and follow the firm’s Twitter feed @EventSharesETFs.
Investors should consider the Fund’s investment objectives, risks, charges and expenses carefully before investing. For a prospectus with this and other information about the Fund, please call (877) 539-1510 or visit our website at www.EventShares.com. Read the prospectus carefully before investing.
Funds distributed by Foreside Fund Services, LLC. Active Weighting Advisors, LLC serves as the investment advisor to the ETFs. Foreside Fund Services, LLC is not affiliated with Active Weighting Advisors, LLC.
Active Weighting Funds are the ETFs under the brand name EventShares.
Shares of the Funds are listed on a national securities exchange, the Bats BZX Exchange (“Exchange” or “Bats BZX”) and trade at market prices. The market price for each Fund’s shares may be different from its net asset value per share (the “NAV”). Shares of each Fund are not individually redeemable. Because fund shares trade at market prices rather than at net asset value (NAV), Fund shares may trade at a price greater than NAV (premium) or less than NAV (discount). Shares of the ETFs may be bought and sold throughout the day on the exchange through any brokerage account. Buying and selling shares of ETFs will result in brokerage commissions.
The shares of the ETFs do not represent a deposit or an obligation of, and are not guaranteed or endorsed by, any bank or other insured depository institution, and are not federally insured by the Federal Deposit Insurance Corporation, the Federal Reserve Board or any other government agency.
Investing involves risk, including the loss of principal. There can be no assurance that the Funds will achieve their investment objectives. The Funds are actively managed ETFs that do not seek to replicate the performance of a specified index.
Investors in the Funds should be willing to accept a high degree of volatility in the price of the Fund’s shares and the possibility of significant losses. An investment in the Funds involve a substantial degree of risk and the Funds do not represent a complete investment program. The Prospectus contains important information about investing in the Funds. Please read this Prospectus carefully before you make any investment decisions.
Losing all or a portion of your investment is a risk of investing in the funds. Government action that is not in line with republican or democratic policies, failure of the government to take positive action on tax reform themes, as well as other factors besides government action may result in losses.
Unanticipated political or social developments may result in sudden and significant investment losses. Political and social developments that are anticipated but at odds with a Fund’s theme may result in sudden and significant investment losses.
The use of hedging and derivatives could produce disproportionate gains or losses and may increase costs. Short positions entered into by the Fund may involve higher risks and costs, and potential losses relating to such investments are not typically limited.
There can be no assurance that an active trading market will develop and be maintained for the shares of the Funds, particularly during periods of market stress. As new Funds, there can be no assurance that the Funds will grow to or maintain an economically viable size, in which case the Funds may ultimately liquidate.
Chris Sullivan/Mike MacMillan, 212-473-4442