Another niche fund advisor is getting its feet wet in the ETF game. This time the applicant with the SEC is technology specialist FirstHand Funds. The San Jose, California-based fund firm is registering an ETF with the SEC that would track 30 tech stocks in the S&P 500. Recently, the advisor to the Ameristock fund registered a new oil-tracking ETF.

The trend of small fund firms seeking to offer ETFs is a new one, and shows that the product has caught the fancy of those inside the fund industry as they scramble for alternative ways to grow their business. So far, however, no small firm has built a substantial business around ETFs.

Firsthand Capital Management registered the Q Funds Technology Focus Portfolio Exchange-Traded Fund. The fund would be different than other ETFs in that it promises to pursue an "active management strategy based entirely upon a quantitative formula for stock selection and portfolio construction," according to its prospectus quoted by the Wall Street Journal.

According to the paper, FirstHand filed sought an exemption from the Investment Company Act in order to create the technology ETF along with a series of funds it may advise down the line.

"We would eventually like to have fully actively managed funds in an ETF package ... but nobody has gone through the process with the SEC to do that," Phil Mosakowski told the paper.

FirstHand is reportedly waiting for a deeper-pocketed ETF sponsor to gain approval for the first actively managed ETF before it takes additional steps on its fund.  

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