Huntington ETFs May Be Nearing Launch
April 12, 2011
Huntington Asset Advisors, the money manager that intends to fold mutual fund assets into a new exchange-traded fund it has in the works, is approaching the launch date to bring to market two actively managed ETFs it first began to describe in a regulatory filing last summer.
The company, a unit of Columbus, Ohio-based Huntington Bank, named the ticker symbols and the prices of the two funds, the Huntington US Equity Rotation Strategy ETF (NYSEArca: HUSE) and the Huntington Ecological Strategy ETF (NYSEArca: HECO). Both ETFs will have annual expense ratios of 0.95 percent, including fee waivers and expense reimbursements, according to a regulatory filing dated April 11. The revelation of tickers and expense often suggests that a fund’s launch is coming soon, if not imminent.
The company’s President and Chief Investment Officer Randy Bateman told IndexUniverse last summer that the company was contemplating pilfering assets from its preexisting mutual fund, the Rotating Index Fund, to seed a new ETF, which it first referred to as the Huntington Global Rotating Strategy Fund. It appears the company still intends to carry out the asset seeding, though company officials weren’t immediately available to elaborate.
While some closed-end funds have been folded into ETFs, Huntington Asset Advisors would appear to be the first company that will collapse an existing mutual fund into an ETF. In a related vein, Vanguard designed its line of ETFs as separate share classes of its existing mutual funds to ease their introduction.
HUSE’s Investment Strategy
HUSE, the rotating strategy ETF, will be at least 75 percent invested in the S&P Composite 1500. That index is a combination of the large-cap S&P 500, the S&P MidCap 400 and the S&P SmallCap 600.
The ETF will rotate investments among the different U.S. equity market segments with a view to focus investments on those areas of the market the advisor believes offer the greatest potential for capital appreciation in a given market environment.
Within a given size sleeve, the ETF will own companies in each of the 10 sectors of the S&P Composite 1500, according to the filing. Those sectors are: utilities, consumer staples, information technology, health care, financials, energy, consumer discretionary, materials, industrials and telecommunication services.
HECO’s Investment Strategy
In a press release last June, Huntington described HECO as the first-ever “actively managed” green ETF.
In the April 11 filing, the company said HECO would invest at least 80 percent of its assets in the stocks of companies with an ecological focus. That would include companies that are components of environmentally focused indexes, such as the Dow Jones Sustainability Indexes and the DB Nasdaq OMX Clean Tech Index.
The fund will also be able to own other companies that derive at least a third of their revenues from sundry business activities that are considered to have a range of environmental themes, the filing said.
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