Is FocusShares back?

Less than three months ago, start-up FocusShares LLC decided to close its four exchange-traded funds.

Now, it's apparently making a comeback bid. The firm filed for exemptive relief just a few days ago that would allow it to launch a family of target date exchange-traded funds.

In October 2008, with not even a year under its belt, FocusShares shuttered a family of niche sector-themed funds. (See story here.)

Entering the target-date retirement market is an interesting choice. It has been a white-hot product area in the mutual funds industry in recent years. Perhaps more importantly, such portfolios with built-in rolling asset allocation plans have been a hit with 401(k) platforms and other retirement programs. 

With ETFs moving closer to overcoming accounting difficulties and other back-office procedural differences in handling transactions, the move by FocusShares could prove well timed. 

The target date retirement fund space, at least in ETFs, is still very new. There are currently just two families of target date ETFs available. One is offered by Barclays Global Investors' iShares family of ETFs that tracks indexes from Standard & Poor's (see related stories here and here).

A slightly older offering is through a partnership between XShares and TD Ameritrade that is based on indexes from Zacks Research. (See related story here.)

Although it is implied in FocusShares' new filing that more funds could follow, the firm's second batch of funds features six target date ETFs:

• Progressive Principal Protection 2015 Target Date Index
• Progressive Principal Protection 2020 Target Date Index
• Progressive Principal Protection 2025 Target Date Index
• Progressive Principal Protection 2030 Target Date Index
• Progressive Principal Protection 2035 Target Date Index
• Progressive Principal Protection 2040 Target Date Index

The funds will track indexes from Mergent Inc.'s Indxis subsidiary. The underlying indexes are a combination of U.S. Government STRIPS and equities, with the weights of both segments varying according to the index's target date (the STRIPS' weight decreases the farther out the target date, while the weighting in equities increases).

The equities portion consists of seven equally weighted asset classes (U.S. Small Cap Value, U.S. Small Cap Growth, U.S. Mid Cap Value, U.S. Mid Cap Growth, U.S. Large Cap Value, U.S. Large Cap Growth and International), each represented by 50 equally weighted securities.

Weightings range from 44% for the STRIPS portion and 8% for each of the seven equity asset classes for the fund targeting 2015 to a 21.04% STRIPS weighting and an 11.28% weighting for the asset classes in the 2045 fund.

You can find the registration document here.