The alternative exchange traded fund investment space is getting ready for an influx of new product offerings as Highland Capital Management, the sponsor behind a senior loan ETF, works on expanding its ETF suite with 17 new offerings.
According to a press release, Highlands has filed for 17 new ETFs that will invest across various alternative asset classes and provide access to sophisticated, hedge-fund-esque strategies.
Specifically, according to a Securities and Exchange Commission filing, Highland is planning the following ETFs, which will best listed on the NYSE Arca:
- HIGHLAND EQUITY HEDGE FUNDAMENTAL GROWTH ETF
- HIGHLAND EQUITY HEDGE FUNDAMENTAL VALUE ETF
- HIGHLAND EQUITY HEDGE MULTI-STRATEGY ETF
- HIGHLAND EQUITY HEDGE TECHNOLOGY ETF
- HIGHLAND EQUITY HEDGE HEALTHCARE ETF
- HIGHLAND EVENT-DRIVEN ACTIVIST ETF
- HIGHLAND EVENT-DRIVEN CREDIT ARBITRAGE ETF
- HIGHLAND EVENT-DRIVEN MERGER ARBITRAGE ETF
- HIGHLAND EVENT-DRIVEN MULTI-STRATEGY ETF
- HIGHLAND MACRO DISCRETIONARY THEMATIC ETF
- HIGHLAND MACRO MULTI-STRATEGY ETF
- HIGHLAND RELATIVE VALUE FIXED-INCOME ASSET BACKED ETF
- HIGHLAND RELATIVE VALUE FIXED-INCOME CONVERTIBLE ARBITRAGE ETF
- HIGHLAND RELATIVE VALUE FIXED-INCOME CORPORATE ETF
- HIGHLAND RELATIVE VALUE FIXED-INCOME SOVEREIGN ETF
- HIGHLAND RELATIVE VALUE VOLATILITY ETF
- HIGHLAND RELATIVE VALUE MULTI-STRATEGY ETF
The proposed ETFs track hedge fund strategies or employ hedge fund investment styles.
For instance, the HIGHLAND EQUITY HEDGE FUNDAMENTAL GROWTH ETF is based off a rules-based index that seeks to track the returns of hedge funds that employ fundamental growth strategies, such as abnormally high levels of growth compared with the growth of relevant benchmarks in earnings, profitability, sales or market share. The HIGHLAND EQUITY HEDGE FUNDAMENTAL VALUE ETF tracks fundamental value strategies that include attractive opportunities due to their current market value being discounted to what the hedge fund manager determines to be the company’s fundamental value.
The HIGHLAND EQUITY HEDGE MULTI-STRATEGY ETF includes various investment styles, including long/short, macro and event-driven hedge fund strategies.
Additionally, the HIGHLAND EQUITY HEDGE TECHNOLOGY ETF focuses on hedge fund picks of tech sector stocks while the HIGHLAND EQUITY HEDGE HEALTHCARE ETF tracks hedge fund picks of healthcare, biotech and pharmaceutical companies.
“We’re pleased to be announcing the registration of these new funds and to expand our ETF offerings,” Ethan Powell, Highland’s Chief Product Strategist, said in the press release. “This important step in launching our new suite of ETFs shows Highland’s dedication and commitment to the ETF space and our consistent drive to provide compelling and differentiated strategies to the investing public.”
The company currently offers one U.S.-listed ETF, the Highland/iBoxx Senior Loan ETF (NYSEArca: SNLN), which tracks the Markit iBoxx Liquid Leveraged Loan Index. The ETF tracks senior floating-rate bank loans. Due to their floating rate component, bank loans are seen as an attractive alternative to traditional high-yield corporate bonds in a rising rate environment. Bank loan securities allow their interest rate to shift, or float, along with the rest of the market, whereas a fixed interest rate stays constant until maturity. [Bank Loan ETFs: The Effects of an Illiquid Underlying Market]
For more information on new product launches, visit our new ETFs category.
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.