Ivy has expanded the way investors can access active investment
management that is packaged with the tax and cost efficiencies
found in exchange trading.
Ivy Investment Management Company (IICO) today introduced its
first three Ivy NextShares as part of a planned lineup of
NextShares exchange-traded managed funds. IICO becomes among the
first to offer the new structure.
“NextShares represent another step in our effort to provide
clients with unique, progressive investment products. We are
pleased to be one of the first firms to bring them to market,” said
Thomas W. Butch, president and CEO of Ivy Distributors, Inc. “Ivy
NextShares offer the potential for competitive investment returns
by applying the strength of Ivy’s experienced portfolio managers
and proprietary investment research in a cost-effective and
tax-effective structure.”
The three Ivy NextShares, effective today, include:
- Ivy Energy NextShares, which
invests at least 80% of its net assets in securities of companies
within all aspects of the energy sector, such as exploration,
discovery, production, distribution or infrastructure of energy
and/or alternative energy sources. The portfolio typically will
hold 50 to 65 stocks. It is managed by veteran portfolio manager
David P. Ginther, CPA, senior vice president of IICO, and Michael
T. Wolverton, CFA, vice president of IICO.
- Ivy Focused Growth NextShares,
which invests primarily in a portfolio of common stocks issued by
large capitalization, growth-oriented companies that the manager
believes have the ability to sustain growth over the long term. The
portfolio typically will maintain a limited number of stocks,
generally 15 to 25. It is managed by veteran portfolio manager
Daniel P. Becker, CFA, senior vice president of IICO, and Bradley
M. Klapmeyer, CFA, vice president and of IICO.
- Ivy Focused Value NextShares,
which invests primarily in the common stocks of companies that the
manager believes are undervalued, trading at a significant discount
relative to the intrinsic value of the company as estimated by IICO
and/or are out of favor in the financial markets but have a
favorable outlook for capital appreciation. The portfolio typically
will maintain a limited number of stocks, generally 15 to 25. It
will be managed by veteran portfolio manager Matthew T. Norris,
CFA, senior vice president of IICO.
“We congratulate Ivy on the launch of their three NextShares
funds,” said Stephen W. Clarke, president of NextShares Solutions,
LLC. “Ivy is leading the evolution of active fund investing to a
potentially better-performing, lower cost and more tax efficient
structure.”
NextShares, an innovative way to invest in actively managed
strategies, offer the potential for benchmark-beating returns by
applying their managers’ proprietary investment research. As
exchange-traded products, NextShares may offer cost and tax
efficiencies that have the potential to enhance shareholder
returns. NextShares may invest across all fund asset classes and
are expected to be offered by a range of well-known asset
managers.
NextShares are currently available through Folio Investing and
Folio Institutional, leading online brokerage services. Interactive
Brokers Group, an automated global electronic broker and market
maker, and Envestnet, a provider of unified wealth management
technology and services, have both announced their intentions to
make NextShares available on their platforms in the near term. In
July 2016, UBS Financial Services announced plans to become the
first full-service wealth manager to offer NextShares through its
financial advisor network in early 2017.
The first NextShares funds were launched by Eaton Vance
Management earlier this year, at which time they began trading on
the Nasdaq Stock Market LLC. In December 2014, the SEC granted
exemptive relief to permit the offering of NextShares
exchange-traded managed funds, and a year later, they declared
effective the registration statements for NextShares funds
sponsored by Eaton Vance Management. The Eaton Vance order
prescribed that a short-form application could be used for future
exemptive relief requests submitted by other advisers that agreed
to abide by the terms and conditions of the Eaton Vance order. IICO
used the short-form to secure the appropriate approvals from the
SEC to launch Ivy NextShares.
About Ivy Investments
Ivy InvestmentsSM is a global organization recognized for
inventive, actively-managed investing strategies that help
investors best meet their long-term goals. It is part of an
organization dating to 1937, with a time-tested investment process
and an authentic and demanding culture – one that values
preparedness, collaboration and accountability. These values extend
from a broad internal investing capability, which reaches all major
asset classes, to subadvisor partners, to the distribution team
that supports advisors and clients.
Ivy Investment Management Company and Ivy Distributors, Inc. are
affiliates of Waddell & Reed Financial, Inc. (NYSE: WDR).
Through its subsidiaries, Waddell & Reed Financial, Inc.
provides investment management and financial planning services to
clients throughout the U.S. The firm had approximately $86 billion
in total assets under management at June 30, 2016.
About NextShares Solutions and Eaton Vance
NextShares Solutions LLC is a wholly owned subsidiary of Eaton
Vance formed to develop and commercialize NextShares. Aspects of
the operation of NextShares are protected intellectual property
owned by NextShares Solutions.
Eaton Vance (NYSE: EV) is a leading global asset manager whose
history dates to 1924. With offices in North America, Europe, Asia
and Australia, Eaton Vance and its affiliates managed $334.3
billion in assets as of July 31, 2016, offering individuals and
institutions a broad array of investment strategies and wealth
management solutions. For more information, see eatonvance.com.
Shares of NextShares funds are normally bought and sold in the
secondary market through a broker, and may not be individually
purchased or redeemed from the fund. In the secondary market,
buyers and sellers transact with each other, rather than with the
fund. NextShares funds issue and redeem shares only in specified
creation unit quantities in transactions by or through Authorized
Participants. In such transactions, a fund issues and redeems
shares in exchange for the basket of securities, other instruments
and/or cash that the fund specifies each business day. By
transacting in kind, a NextShares fund can lower its trading costs
and enhance fund tax efficiency by avoiding forced sales of
securities to meet redemptions. Redemptions may be effected
partially or entirely in cash when in-kind delivery is not
practicable or deemed not in the best interests of shareholders. A
fund’s basket is not intended to be representative of the fund’s
current portfolio positions and may vary significantly from current
positions. As exchange-traded securities, NextShares can operate
with low transfer agency expenses by utilizing the same highly
efficient share processing system as used for exchange-listed
stocks and ETFs.
Market trading prices of NextShares are linked to the fund’s
next-computed net asset value (NAV) and will vary from NAV by a
market-determined premium or discount, which may be zero. Buyers
and sellers of NextShares will not know the value of their
purchases and sales until after the fund’s NAV is determined at the
end of the trading day. Market trading prices may vary
significantly from anticipated levels. NextShares do not offer
investors the opportunity to buy and sell intraday based on current
(versus end-of-day) determinations of fund value. NextShares trade
execution prices will fluctuate based on changes in NAV. Although
limit orders may be used to control trading costs, they cannot be
used to control or limit trade execution prices. As a new type of
fund, NextShares have a limited operating history and may initially
be available through a limited number of brokers. There can be no
guarantee that an active trading market for NextShares will develop
or be maintained, or that their listing will continue unchanged.
Buying and selling NextShares may require payment of brokerage
commissions and expose transacting shareholders to other trading
costs. Frequent trading may detract from realized investment
returns. The return on a shareholder’s NextShares investment will
be reduced if the shareholder sells shares at a greater discount or
narrower premium to NAV than he or she acquired the shares.
Risk factors: The value of the Fund’s shares will change,
and you could lose money on your investment. An investment in the
Fund is not a bank deposit and is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government
agency. Ivy Energy NextShares: Investing in companies
involved in one specified sector may be more risky and volatile
than an investment with greater diversification. Investing in the
energy sector can be riskier than other types of investment
activities because of a range of factors, including price
fluctuation caused by real and perceived inflationary trends and
political developments, and the cost assumed by energy companies in
complying with environmental safety regulations. These and other
risks are more fully described in the Fund’s prospectus. Ivy
Focused Growth NextShares: Investing in companies involved
primarily in a single asset class (large cap) may be more risky and
volatile than an investment with greater diversification. Growth
stocks may be more volatile or not perform as well as value stocks
or the stock market. These and other risks are more fully described
in the Fund’s prospectus. Ivy Focused Value NextShares: The
value of a security believed by the Fund’s manager to be
undervalued may never reach what the manager believes to be its
full value, or such security’s value may decrease. Investing in
companies in anticipation of a catalyst carries the risk that
certain of such catalysts may not happen or the market may react
differently than expected to such catalysts, in which case the Fund
may experience losses. The securities of many companies may have
significant exposure to foreign markets as a result of the
company’s operations, products or services in those foreign
markets. As a result, a company’s domicile and/or the markets in
which the company’s securities trade may not be fully reflective of
its sources of revenue. Such securities would be subject to some of
the same risks as an investment in foreign securities, including
the risk that political and economic events unique to a country or
region will adversely affect those markets in which the company’s
products or services are sold. These and other risks are more fully
described in the Fund’s prospectus.
NextSharesTM is a trademark of NextShares Solutions LLC. All
rights reserved. Used with permission.
Ivy NextShares funds are managed by Ivy Investment Management
Company and are distributed by ALPS Distributors, Inc.
ALPS Distributors, Inc., NextShares Solutions LLC, and Ivy
Investment Management Company or Ivy Distributors, Inc. (or their
affiliates), are all unaffiliated companies.
IVY INVESTMENTS℠ refers to the financial products and services
offered by Ivy Distributors, Inc., a FINRA member broker dealer and
the distributor of IVY FUNDS® mutual funds, and those financial
products and services offered by its affiliates, including Ivy
Investment Management Company, an SEC registered investment
advisor.
Before investing, investors should consider carefully the
investment objectives, risks, charges and expenses of an Ivy
NextShares exchange-traded managed fund. This and other important
information is contained in the prospectus and summary prospectus,
which may be obtained from www.ivyinvestments.com or
from a financial advisor. Read it carefully before
investing.
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version on businesswire.com: http://www.businesswire.com/news/home/20161018005143/en/
Ivy InvestmentsRoger Hoadley, 913-236-1993VP, Director of
Communicationsrhoadley@ivyinvestments.com
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