Industry veteran Christian Magoon has teamed up with white label exchange-traded fund (ETF) provider Exchange Traded Concepts to launch YieldShares, a newly created ETF sponsor that will focus on income ETFs.
The sponsor’s planned debut ETF, the YieldShares High Income ETF (YYY), is currently awaiting approval from the US Securities and Exchange Commission.
The fund will seek to track the performance of the ISE High Income Index, an index measuring the performance of the top 30 US exchange-listed closed-end funds (CEFs), as selected and ranked according to factors designed to result in a portfolio that produces high current income.
The ISE High Income Index was developed in a partnership between YieldShares and exchange operator and index provider International Securities Exchange (ISE). The selection process assesses CEF variables including market capitalisation, distribution rate and premiums and discounts to net asset value.
The creation of YieldShares occurs in the midst of a challenging environment for income investors. Yields are historically low and investors are searching for new avenues to increase investment income.
Commenting on the launch, Magoon said: “YieldShares seeks to develop and make available investment vehicles that produce attractive monthly income for shareholders. We expect the YieldShares High Income ETF (YYY) will set itself apart within the current income ETF space.”
Magoon, a key figure in more than 50 ETF launches to date, previously served as president of Claymore Securities, now Guggenheim Investments. Guggenheim’s ETF line-up includes some innovative products such as a suite of equal weight funds and a series of defined-maturity bond ‘BulletShares’.
Magoon is also a noted ETF author and has, via his Magoon Capital business, provided strategic counsel to ETF-related firms on product development, marketing and distribution.
In a statement on the Magoon Capital website he wrote: “On a personal note, I am looking forward to returning to the ETF industry as an ETF Sponsor. Since forming Magoon Capital in 2010, I have enjoyed advising potential and existing ETF Sponsors on product development, marketing and distribution. It has also been rewarding to share thoughts on investing and ETFs through platforms including the Wall Street Journal, Index Universe, Twitter and Seeking Alpha.”
J. Garrett Stevens, CEO of Exchange Traded Concepts, said: “YieldShares’ choice to work with us reinforces the value of leveraging our counsel and operational expertise to introduce compelling solutions to the ETF marketplace. Christian Magoon has a strong track record of designing and marketing ETFs and our platform will enable him to leverage that expertise.”
Kris Monaco, Head of ISE ETF Ventures, said: “Partnering with YieldShares to create the ISE High Income Index is a demonstration of ISE’s growing presence in the indexing space. This agreement provides YieldShares with the global experience and network of ISE ETF Ventures while leveraging ISE’s business development, marketing support and capital to effectively bring products to market. We look forward to growing this partnership with YieldShares and Christian Magoon.”
The date set for the YieldShares High Income ETF to go live is unknown; however, Exchange Traded Concepts’ turn-key solution allows prospective ETF sponsors to launch an ETF in as little as 75 days from start to finish. YieldShares is already well advanced along this timeline, meaning a launch could be imminent.