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Fund News Advisors Can Use: OSAM’s Canvas Adds Defensive Models in Departure From ‘Factor Alpha’

In this week's fund news, OSAM's direct index platform Canvas adds four defensive and dividend-growth models, Cboe files to list Fidelity Bitcoin ETF, and ETF Managers Group lists a new cannabis ETF with U.S. exposure.

O’Shaughnessy Asset Management, a money management firm in Stamford, Conn., announced it has added four new defensive and dividend-growth models to its custom indexing platform Canvas. The new models were built out of demand from the firm’s RIA clients for better downside protection through dividend growth and defensive factors.

The move represents a departure for OSAM, which has been traditionally focused on quantitative research and factor investing focused on driving excess returns, referred to as “factor alpha,” with passive exposure.

The expansion into new territory reflects a need for advisors to accommodate clients with greatly differing goals all through one platform,” the firm said in a statement.

“Investors want access to a broad range of exposures as well as alternatives to widely-accepted, off-the-shelf products,” said Patrick O’Shaughnessy, CEO of OSAM. “Applying factor-based research and quantitative rigor to problems is a strength of ours and can lead to improved and very differentiated options that our entire client base can access through Canvas. Offering solutions via the software-based platform creates a seamless and scalable environment for advisors to create and manage custom indexes. Importantly, implementing strategies through SMAs and not mutual funds, ETFs or traditional index funds allows advisors to reap the benefits of continuous tax management—a problem our fund peers cannot solve.”

In February, OSAM announced that Canvas had reached more than $1 billion in AUM since launching a year prior. At the time, the firm said the platform had 580 client accounts across nine RIAs, including Ritholtz Wealth Management, run by Chairman and CIO Barry Ritholtz and CEO Josh Brown.

Cboe Files to List Fidelity’s Bitcoin ETF

Cboe filed with the Securities and Exchange Commission this week on seeking approval to list and trade Fidelity’s bitcoin ETF, the Wise Origin Bitcoin Trust.

The filing points to significant progress in the digital assets ecosystem since the first attempt to list a bitcoin exchange traded product in June 2016.

“The development of a regulated market for digital asset securities has significantly evolved, with market participants having conducted registered public offerings of both digital asset securities and shares in investment vehicles holding bitcoin futures,” the filing said. “Additionally, licensed and regulated service providers have emerged to provide fund custodial services for digital assets, among other services.”

The filing also argued that concerns about potential manipulation of a bitcoin ETP have been “sufficiently mitigated.”

There’s a race among asset management firms to launch the first bitcoin ETF in the United States. But new SEC Chair Gary Gensler’s recent comments on the matter could be a setback for bitcoin ETF approvals, according to Bloomberg.  

Issuer of MJ Launches Second Pot ETF—With a U.S. Bent

Exchange traded funds with exposure to cannabis companies have reaped the benefits of the continuing efforts to legalize marijuana. New York recently became the 15th state to legalize recreational marijuana, for instance.

The ETFMG Alternative Harvest ETF (MJ), the first U.S.-listed and largest cannabis ETF with $1.7 billion in assets under management, is up 77.3% in the last year. ETF Managers Group, the same issuer that brought MJ to market, announced this week that its ETFMG U.S. Alternative Harvest ETF (MJUS), which provides exposure to U.S. cannabis companies, including multi-state operators, has begun trading.

“Currently, U.S. cannabis single and multi-state operators are only available to investors through second-tier, foreign exchanges, which are not widely accessible through U.S. brokerages,” the issuer said in a statement. “MJUS’s unique investment strategy rivals that of its competitors by offering investors a way to benefit from the continued growth of the U.S. cannabis industry and the leading companies directly involved in U.S. cannabis-related activities.”

Some of the top holdings include Curaleaf Inc., Green Thumb Industries, Cresco Labs and Trulieve Cannabis Corp., to name a few.

VanEck Kicks Off Race for First U.S. Ethereum ETF

VanEck Associates filed with the Securities and Exchange Commission this week to launch the VanEck Ethereum Trust, the first application for a U.S. ETF tracking the cryptocurrency ether, according to reports by Bloomberg.

As Bloomberg points out, Canada beat out the U.S. in launching the first ether ETFs in North America last month. The country also launched the first bitcoin ETF, which the U.S. is still waiting on.

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