New York Firm, BroadSouth, Plans ETFs
August 30, 2012
BroadSouth Investment Management, a New York-based money management firm, filed paperwork with the Securities and Exchange Commission to offer a broad lineup of ETFs focused on equities and fixed income that trade in U.S. and non-U.S. markets.
The company said its initial funds will be based on “Blended Global Indices,” and it identified S&P Dow Jones Indices as a likely index provider for its planned funds. In any case, it made clear that indexes won’t be “affiliated”—industry jargon to make clear that the company doesn’t plan to self-index.
BroadSouth’s “exemptive relief” petition is the latest sign that the ETF industry is continuing to grow. While that growth has shown signs of slowing down in recent months, few doubt that the $1.240 trillion now invested in 1,475 U.S.-listed ETFs is but a fraction of what both the assets and number of funds will be in the coming years.
“Exemptive relief” grants firms exceptions to certain sections of the Investment Company Act of 1940, and is the first step companies must take to earn the right to market ETFs. It often takes anywhere from six to nine months for a company’s first ETF to come to market after it has filed for exemptive relief.
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