The U.S. Securities and Exchange Commission Issues Notice of Intention to Permit Blue Tractor Group’s Shielded Alpha℠ ETF Structure
The Shielded Alpha ETF structure is available for license by fund advisors seeking to manage active strategies within an ETF wrapper, while still fully protecting their alpha generation strategy
Shielded Alpha℠ structure is 180 degrees differentiated from Precidian’s non-transparent ActiveShares®, providing fund advisors with real choice over what ETF wrapper to use for active portfolio management
The Shielded Alpha℠ ETF structure is available for license by fund advisors seeking to manage active strategies within an ETF wrapper, while still fully protecting their alpha generation strategy
NEW YORK, Nov. 18, 2019 (GLOBE NEWSWIRE) -- Blue Tractor Group, LLC (“Blue Tractor”) is pleased to announce that the U.S. Securities and Exchange Commission (“SEC”) has issued notice of its intention to permit Blue Tractor’s groundbreaking Shielded Alpha℠ exchange-traded fund (“ETF”) structure. Blue Tractor wishes to thank the SEC for its constructive and collaborative regulatory approval process. The SEC issued its notice on November 14, 2019 and formal approval is anticipated on or about December 10, 2019.
The Shielded Alpha℠ structure is a ‘wrapper’ that facilitates management of actively managed portfolio strategies within an ETF rather than in a traditional mutual fund, thereby conferring the benefits of an ETF to advisors and investors alike, including lower cost, greater tax efficiency and intra-day liquidity. Similar to a fully transparent active ETF, the Shielded Alpha℠ wrapper is a highly transparent structure designed to ensure efficient primary and secondary market trading. However, unlike a transparent active ETF that publishes its full portfolio daily, the Shielded Alpha℠ structure uses proprietary math to generate a published daily creation basket that allows an advisor’s alpha generation strategy and portfolio trading execution to remain fully opaque to predatory traders, fully eliminating the risk of reverse engineering and associated front-running and free-riding. Implementation of a Shielded Alpha℠ ETF is streamlined and efficient because all workflow to generate the daily creation basket is done using Blue Tractor’s cloud-hosted platform.
Commented Terry Norman, Founder of Blue Tractor, “We are delighted by the SEC’s action and note that their announcement will end the monopoly enjoyed since May 2019 by Precidian for non-transparent ActiveShares®. With the anticipated approval of Blue Tractor’s highly transparent Shielded Alpha℠ structure, advisors will have real choice over the type of novel ETF wrapper they utilize to implement their actively managed strategies.”
The Shielded Alpha℠ ETF wrapper is clearly differentiated from ActiveShares® and other competing non-transparent and/or semi-transparent wrappers, including:
- Shielded Alpha℠ is a highly transparent ETF;
- All workflow to generate the creation basket is hosted in the Blue Tractor cloud;
- Unlike ActiveShares®, the investable universe for a Shielded Alpha℠ ETF may include foreign securities; and
- Using the intuitive cloud software, advisors can manage the daily creation basket to lower trading costs, enhance capital gains tax efficiency and fully obfuscate trading execution when building or exiting portfolio positions.
Noted Simon Goulet, Co-Founder of Blue Tractor, “We are confident that Blue Tractor has raised the bar. Advisors wishing to offer investors proprietary actively managed portfolio strategies within an ETF wrapper can now license the Shielded Alpha℠ ETF wrapper and its cloud-hosted service.”
In pursuit of SEC approval for the Shielded Alpha℠ ETF wrapper Blue Tractor received constructive guidance and encouragement from numerous ETF market participants, including major market making firms, listing exchanges, many fund advisors and custodial banks, distributors, fund administrators, fund supermarkets, wirehouses and broker dealers, ETF consultants and pundits and the financial press. Blue Tractor looks forward to continuing its relationship with these firms and individuals.
Blue Tractor’s final application for exemptive relief for the Shielded Alpha℠ ETF structure (dated October 23, 2019) was prepared by Michael W. Mundt, Partner in the Washington, D.C. office of Stradley Ronon Stevens & Young, LLP and is available for review, along with the SEC’s notice, on the SEC’s website through the EDGAR database at sec.gov and at bluetractorgroup.com.
About Blue Tractor Group
Blue Tractor Group, LLC develops novel solutions to facilitate novel exchange-traded fund products. Blue Tractor’s Shielded Alpha℠ ETF structure (patent pending) permits active fund management within an ETF wrapper, while fully shielding the fund’s proprietary alpha strategy. More information is available at bluetractorgroup.com.
Contact:
Chris Sullivan
MacMillan Communications
(212) 473-4442
[email protected]
