Eaton Vance Corp has launched its long awaited exchange-traded mutual fund, the Eaton Vance Stock NextShares (Nasdaq: EVSTC), on Nasdaq. It is the first of several anticipated NextShares funds that are expected to follow this year.
The fund is the first of its kind and is classed as a hybrid between an actively managed fund and an ETF. It will follow a research-driven core investment strategy, primarily holding a diversified portfolio of common stock to seek long-term capital appreciation.
Eaton Vance Corp is pioneering a new type of exchange-traded vehicle that protects the fund manager’s strategies from being exposed in real-time yet maintains the benefits of intraday tradability common to ETFs.
“The Fund is the first of several NextShares funds that we expect to introduce this year,” said Thomas E. Faust Jr., Chairman and Chief Executive Officer of Eaton Vance. “Our initial NextShares will offer investors access to established fund strategies in a new structure with significant potential investor benefits. The Fund’s introduction provides the first opportunity to demonstrate the performance, tax efficiency and trading characteristics of NextShares.”
Jeff McCarthy, Head of Exchange-Traded Product Listing at Nasdaq, added: “We’re pleased to serve as the listing and trading venue for NextShares. Extensive preparations have been made to develop technology to support NextShares trading and reporting, and the final stages of testing are currently in process.”
Similar to mutual funds, the new vehicle will protect and harness the manager’s proprietary research in a bid to obtain benchmark-beating returns. The fund will still enjoy intraday trading however, with all trades being finalised at day’s end with prices reflecting the fund’s Net Asset Value plus or minus a trading cost (premium/discount) that was established at the time the trade was executed. This intraday tradability will allow the funds to maintain significant cost and tax advantages.
The initial fund launch has been made available to individual investors, financial advisors and institutions through leading online broker-dealers Folio Investing and Folio Institutional. Steve Wallman, CEO and founder of Folio Investing, said: “NextShares is an innovative offering that can provide real benefits to investors, and we are pleased to serve as the first broker offering trading.”
Eaton Vance has thus far registered 18 NextShares funds for future launches, targeting a broad range of actively managed equity, fixed income, and multi-asset strategies.