OVERLAND PARK, Kan.--(BUSINESS WIRE)--Ivy has expanded the way investors can access active investment management that is packaged with the tax and cost efficiencies found in exchange trading.
Ivy Investment Management Company (IICO) today introduced its first three Ivy NextShares as part of a planned lineup of NextShares exchange-traded managed funds. IICO becomes among the first to offer the new structure.
“NextShares represent another step in our effort to provide clients with unique, progressive investment products. We are pleased to be one of the first firms to bring them to market,” said Thomas W. Butch, president and CEO of Ivy Distributors, Inc. “Ivy NextShares offer the potential for competitive investment returns by applying the strength of Ivy’s experienced portfolio managers and proprietary investment research in a cost-effective and tax-effective structure.”
The three Ivy NextShares, effective today, include:
- Ivy Energy NextShares, which invests at least 80% of its net assets in securities of companies within all aspects of the energy sector, such as exploration, discovery, production, distribution or infrastructure of energy and/or alternative energy sources. The portfolio typically will hold 50 to 65 stocks. It is managed by veteran portfolio manager David P. Ginther, CPA, senior vice president of IICO, and Michael T. Wolverton, CFA, vice president of IICO.
- Ivy Focused Growth NextShares, which invests primarily in a portfolio of common stocks issued by large capitalization, growth-oriented companies that the manager believes have the ability to sustain growth over the long term. The portfolio typically will maintain a limited number of stocks, generally 15 to 25. It is managed by veteran portfolio manager Daniel P. Becker, CFA, senior vice president of IICO, and Bradley M. Klapmeyer, CFA, vice president and of IICO.
- Ivy Focused Value NextShares, which invests primarily in the common stocks of companies that the manager believes are undervalued, trading at a significant discount relative to the intrinsic value of the company as estimated by IICO and/or are out of favor in the financial markets but have a favorable outlook for capital appreciation. The portfolio typically will maintain a limited number of stocks, generally 15 to 25. It will be managed by veteran portfolio manager Matthew T. Norris, CFA, senior vice president of IICO.
“We congratulate Ivy on the launch of their three NextShares funds,” said Stephen W. Clarke, president of NextShares Solutions, LLC. “Ivy is leading the evolution of active fund investing to a potentially better-performing, lower cost and more tax efficient structure.”
NextShares, an innovative way to invest in actively managed strategies, offer the potential for benchmark-beating returns by applying their managers’ proprietary investment research. As exchange-traded products, NextShares may offer cost and tax efficiencies that have the potential to enhance shareholder returns. NextShares may invest across all fund asset classes and are expected to be offered by a range of well-known asset managers.
NextShares are currently available through Folio Investing and Folio Institutional, leading online brokerage services. Interactive Brokers Group, an automated global electronic broker and market maker, and Envestnet, a provider of unified wealth management technology and services, have both announced their intentions to make NextShares available on their platforms in the near term. In July 2016, UBS Financial Services announced plans to become the first full-service wealth manager to offer NextShares through its financial advisor network in early 2017.
The first NextShares funds were launched by Eaton Vance Management earlier this year, at which time they began trading on the Nasdaq Stock Market LLC. In December 2014, the SEC granted exemptive relief to permit the offering of NextShares exchange-traded managed funds, and a year later, they declared effective the registration statements for NextShares funds sponsored by Eaton Vance Management. The Eaton Vance order prescribed that a short-form application could be used for future exemptive relief requests submitted by other advisers that agreed to abide by the terms and conditions of the Eaton Vance order. IICO used the short-form to secure the appropriate approvals from the SEC to launch Ivy NextShares.
About Ivy Investments
Ivy InvestmentsSM is a global organization recognized for inventive, actively-managed investing strategies that help investors best meet their long-term goals. It is part of an organization dating to 1937, with a time-tested investment process and an authentic and demanding culture – one that values preparedness, collaboration and accountability. These values extend from a broad internal investing capability, which reaches all major asset classes, to subadvisor partners, to the distribution team that supports advisors and clients.
Ivy Investment Management Company and Ivy Distributors, Inc. are affiliates of Waddell & Reed Financial, Inc. (NYSE: WDR). Through its subsidiaries, Waddell & Reed Financial, Inc. provides investment management and financial planning services to clients throughout the U.S. The firm had approximately $86 billion in total assets under management at June 30, 2016.
About NextShares Solutions and Eaton Vance
NextShares Solutions LLC is a wholly owned subsidiary of Eaton Vance formed to develop and commercialize NextShares. Aspects of the operation of NextShares are protected intellectual property owned by NextShares Solutions.
Eaton Vance (NYSE: EV) is a leading global asset manager whose history dates to 1924. With offices in North America, Europe, Asia and Australia, Eaton Vance and its affiliates managed $334.3 billion in assets as of July 31, 2016, offering individuals and institutions a broad array of investment strategies and wealth management solutions. For more information, see eatonvance.com.
Shares of NextShares funds are normally bought and sold in the secondary market through a broker, and may not be individually purchased or redeemed from the fund. In the secondary market, buyers and sellers transact with each other, rather than with the fund. NextShares funds issue and redeem shares only in specified creation unit quantities in transactions by or through Authorized Participants. In such transactions, a fund issues and redeems shares in exchange for the basket of securities, other instruments and/or cash that the fund specifies each business day. By transacting in kind, a NextShares fund can lower its trading costs and enhance fund tax efficiency by avoiding forced sales of securities to meet redemptions. Redemptions may be effected partially or entirely in cash when in-kind delivery is not practicable or deemed not in the best interests of shareholders. A fund’s basket is not intended to be representative of the fund’s current portfolio positions and may vary significantly from current positions. As exchange-traded securities, NextShares can operate with low transfer agency expenses by utilizing the same highly efficient share processing system as used for exchange-listed stocks and ETFs.
Market trading prices of NextShares are linked to the fund’s next-computed net asset value (NAV) and will vary from NAV by a market-determined premium or discount, which may be zero. Buyers and sellers of NextShares will not know the value of their purchases and sales until after the fund’s NAV is determined at the end of the trading day. Market trading prices may vary significantly from anticipated levels. NextShares do not offer investors the opportunity to buy and sell intraday based on current (versus end-of-day) determinations of fund value. NextShares trade execution prices will fluctuate based on changes in NAV. Although limit orders may be used to control trading costs, they cannot be used to control or limit trade execution prices. As a new type of fund, NextShares have a limited operating history and may initially be available through a limited number of brokers. There can be no guarantee that an active trading market for NextShares will develop or be maintained, or that their listing will continue unchanged. Buying and selling NextShares may require payment of brokerage commissions and expose transacting shareholders to other trading costs. Frequent trading may detract from realized investment returns. The return on a shareholder’s NextShares investment will be reduced if the shareholder sells shares at a greater discount or narrower premium to NAV than he or she acquired the shares.
Risk factors: The value of the Fund’s shares will change, and you could lose money on your investment. An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Ivy Energy NextShares: Investing in companies involved in one specified sector may be more risky and volatile than an investment with greater diversification. Investing in the energy sector can be riskier than other types of investment activities because of a range of factors, including price fluctuation caused by real and perceived inflationary trends and political developments, and the cost assumed by energy companies in complying with environmental safety regulations. These and other risks are more fully described in the Fund’s prospectus. Ivy Focused Growth NextShares: Investing in companies involved primarily in a single asset class (large cap) may be more risky and volatile than an investment with greater diversification. Growth stocks may be more volatile or not perform as well as value stocks or the stock market. These and other risks are more fully described in the Fund’s prospectus. Ivy Focused Value NextShares: The value of a security believed by the Fund’s manager to be undervalued may never reach what the manager believes to be its full value, or such security’s value may decrease. Investing in companies in anticipation of a catalyst carries the risk that certain of such catalysts may not happen or the market may react differently than expected to such catalysts, in which case the Fund may experience losses. The securities of many companies may have significant exposure to foreign markets as a result of the company’s operations, products or services in those foreign markets. As a result, a company’s domicile and/or the markets in which the company’s securities trade may not be fully reflective of its sources of revenue. Such securities would be subject to some of the same risks as an investment in foreign securities, including the risk that political and economic events unique to a country or region will adversely affect those markets in which the company’s products or services are sold. These and other risks are more fully described in the Fund’s prospectus.
NextSharesTM is a trademark of NextShares Solutions LLC. All rights reserved. Used with permission.
Ivy NextShares funds are managed by Ivy Investment Management Company and are distributed by ALPS Distributors, Inc.
ALPS Distributors, Inc., NextShares Solutions LLC, and Ivy Investment Management Company or Ivy Distributors, Inc. (or their affiliates), are all unaffiliated companies.
IVY INVESTMENTS℠ refers to the financial products and services offered by Ivy Distributors, Inc., a FINRA member broker dealer and the distributor of IVY FUNDS® mutual funds, and those financial products and services offered by its affiliates, including Ivy Investment Management Company, an SEC registered investment advisor.
Before investing, investors should consider carefully the investment objectives, risks, charges and expenses of an Ivy NextShares exchange-traded managed fund. This and other important information is contained in the prospectus and summary prospectus, which may be obtained from www.ivyinvestments.com or from a financial advisor. Read it carefully before investing.
