First Trust Advisors today launched two new exchange-traded funds (ETFs) on the NYSE Arca exchange, seeking to provide capital appreciation while attempting to mitigate volatility using a proprietary quantitative and rules-based investment process. The New York Stock Exchange (NYSE) said the listing of the two new ETFs marks the first time an issuer has utilized the new streamlined generic listing rules approved last month.
Launched today, the First Trust Horizon Managed Volatility Domestic ETF (HUSV) and First Trust Horizon Managed Volatility Developed International ETF (HDMV) are two actively managed funds that invest primarily in common stocks that the funds’ sub-advisor, Horizon Investments, believes exhibit low future expected volatility.
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According to NYSE, the new streamlined listing process no longer requires a separate filing with the Securities and Exchange Commission (SEC).
HDMV and HUSV funds are built upon the idea that portfolios of low-beta and low-volatility stocks can produce higher risk-adjusted returns than portfolios of high-beta and high-volatility stocks. Although both funds will use the same approach to select and weight stocks based on their future expected volatility, HDMV selects its holdings from 20 different developed markets, while HUSV’s portfolio includes companies solely from the U.S.
Doug Yones, NYSE Head of Exchange Traded Products, commented on the launch: “We worked extensively with industry to support an innovative, efficient solution for the listing process for actively managed funds to support new product development for our issuers. It’s fantastic that First Trust is the first issuer to benefit from this new process, and we look forward to welcoming others in the near future.”
“We believe that the generic listing standards for actively-managed ETFs are an important step forward for the ETF industry. As a leading provider of actively-managed ETFs, First Trust is excited to be the first to take advantage of these new rules with the launch of these two new ETFs,” added Ryan Issakainen, Senior Vice President at First Trust in an accompanying statement.