2019 – the year of zero-fee ETFs

by , 31st December 2018

A significant number of active investors have been transitioning to the passive market due to exchange-traded funds’ competitive fees. This year has seen some of the largest ETF issuers offering fees of single digit basis points.

Calgary-based Accelerate Financial Technologies has filed its prospectus for its initial suite of ETFs. Set to trade on the Toronto Stock Exchange, the suite of ETFs includes a 0 per cent management fee. The funds will only earn a performance fee if they outperform their high-water mark. A high-water mark ensures the fund manager doesn’t get paid large sums if the ETF has a poor performance.

Julian Klymochko, Founder and CEO of Accelerate, said in a statement: “Accelerate is focused on bringing much needed innovation to the investment management sector by offering performance-oriented investment strategies with fee structures that align our interests with investors. We look forward to bringing additional innovative investment strategies to the marketplace as we seek to become the leader in exchange traded alternative funds.”

Accelerate Absolute Return Hedge Fund (HDGE) – a systematic long-short North American equity strategy that seeks to achieve long-term capital appreciation and a superior risk-adjusted return relative to the broader Canadian equity market.

Accelerate Enhanced Benchmark Alternative Fund (ATSX) – a long-short Canadian equity strategy that seeks to achieve long-term capital appreciation and a superior risk-adjusted return relative to the broader Canadian equity market.

Accelerate Private Equity Alpha Fund (ALFA) – a systematic long-short North American equity strategy that seeks to replicate private equity returns utilizing liquid public securities.