Performance has not been great in the existing ETFs due to shuttering, and the "sin" ETF has had a terrible year.

On a relative basis, though, the soon-to-be-closed ETFs have done no worse than the broad equities market, and in some cases, have outperformed. Consider:

• The ISE SINdex Fund (NYSEArca: PUF) is down 40% year-to-date, and 20% in the past three months, through Sept. 30, according to Morningstar data.

• The ISE-CCM Homeland Security ETF (NYSEArca: MYP) is down 18% for the year, and 15% for the past three months, but that still beats the performance of the S&P 500.

FocusShares couldn't even develop any traction for the ETFs whose performance has beaten the market by a wide swath. The ISE Homebuilders Index ETF (NYSEArca: SAW) is down 20% year-to-date, but actually up 4.3% in the past three months, outperformance of more than 24% of its peers.

The ISE-Revere Wal-Mart Suppliers Index ETF (NYSEArca: WSI) is the best of the pack year-to-date, down 12%, and down only 6.7% in the past three months. That is more than an 18% outperformance of the S&P year-to-date.

Just A Distraction 

"There's just no economy to support those [tactical] products now, so investing in the long-term future is a better approach for us," Liik said, adding that the tactical funds, even the unlaunched ones, would just be a distraction to the company now.

With the investor, and the population more generally risk-averse right now, ETF solutions to addressing those concerns can tap an unmet need among advisors and investors, he added. "We believe these solutions-based ETFs will be more scalable than the tactical funds," Liik said.

For the tactical funds, FocusShares used a series of indexes licensed from the International Securities Exchange (ISE). Liik said no final determination has been made on index partners for the new portfolios, and that is one of the reasons why the filing for the new funds may not occur until Nov. 30.

The development of a solutions-based approach, and the competitive nature of product innovation in the ETF space, has also led the company to hire its first in-house general counsel. FocusShares has tapped George Marootian—who has spent 30 years at Schering-Plough, the last 10 years as assistant secretary to the big pharma company—to the new general counsel position. Notably, Marootian has extensive experience in patent law, which could prove important to the ETF provider in terms of protecting any intellectual property related to its new investment approach, Liik notes.

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