NextShares Declared Effective by the SEC
A new type of actively managed fund could likely improve net performance for investors and traders. On December 11, 2015, the SEC declared the registration statement for the registered funds offered by NextShares Solutions LLC ("NextShares") effective. NextShares are a new type of actively managed exchange-traded product. NextShares are designed to provide better net performance than actively managed mutual funds and exchange-traded funds (ETFs). Unlike ETFs, NextShares protect the confidentiality of a fund's portfolio holdings, which protects against front-runners and copycat traders. Front-runners and copycat traders may increase a fund's trading costs and cut into performance. Unlike mutual funds, NextShares have built-in cost and tax efficiencies. For example, unlike most mutual fund share classes, NextShares do not charge sales loads, distribution fees or service fees. NextShares also generally do not need to hold a reserve of cash as a buffer against shareholder withdrawals. By holding less cash, investors using NextShares can increase their net performance when investment returns exceed cash returns.
Several leading asset managers have announced plans to provide NextShares to their customers. The registered funds offered by NextShares are the first funds to complete the registration process with the SEC. These funds are being sponsored by Eaton Vance Management and have a range of active investment strategies such as equity, fixed income and multi-asset strategies.
"Today's action by the SEC is the last regulatory step required to launch the initial NextShares funds," said Stephen W. Clarke, President of NextShares Solutions. "We look forward to the staged introduction of NextShares beginning in the first quarter of 2016."
To read the NextShares' press release, please click on the link below:
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