A Gotham ETF Startup Targets the Crown Jewels of This Market
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Friday, November 13, 2020

A Gotham ETF Startup Targets the Crown Jewels of This Market

A New York City-based ETF startup recently rolled out their first fund, in advance of a big holiday on the other side of the world. Stay tuned for them to debut more ETFs down the line.

Amit Anand
After quietly launching the Nifty India Financials ETF (INDF) on the NYSE last month, this week the NextFins team is trumpeting their inaugural fund in advance of Diwali, the Indian festival of lights, which is tomorrow. NextFins teamed up Exchange Traded Concepts (ETC), which is the advisor to the new ETF, and the fund is a passive one designed to track the Nifty Financial Services 25/50 Index.

SEI is the distributor and administrator for the new ETF. BBH is the custodian and transfer agent. Morgan Lewiws & Bockius provides legal counsel. And Cohen & Company is the independent accounting firm.

Amit Anand, co-founder of NextFins, hails from the hedge fund world, and he describes the new firm as a way to bring that kind of thinking to the ETF space, via both passive funds (like INDF) and active ones.

"The puck is definitely going towards better liquidity, more transparency, lower fees," Anand tells MFWire. "There's a massive opportunity. There are a lot of powerful investment ideas that a lot of hedge fund managers have used for over a decade to produce market-beating returns ... And investor demand is moving to ETFs."

The NextFins team is specially interested in strategies that are "either historically hard to access or ... just really good from an investment perspective." Of course, to fit inside ETFs, the strategies will need to feature enough liquidity and diversification, Anand notes.

Looking to possible future launches, Anand hints that the team has asked, "what are some of the most successful investment philosophies of the top decile hedge funds globally?" They came with "about five factors that lead to outperformance."

"Indian financials [which INDF invests in] are one of those factors," Anand says. "There are at least four other factors that are powerful investment theses that deserve to be in ETFs."

As for their first fund, Anand notes that "India is a fantastic place to invest," but it can be difficult for individual investors here to act on that conviction.

"The overall market doesn't produce great returns," Anand says. With some research, the NextFins team homed in on Indian financial sector companies in particular. "They really are the crown jewels of the Indian stock market."

"The top publicly listed Indian financial companies have been powerful compounding machines over the last two decades for reasons that are both structural and unique to the Indian economy," states Nicholas Thadaney, senior advisor to NextFins. "Previously, it was very costly to invest in these companies."

They're making a big push this week, Anand explains, because of the significance (cultural, economic, and religious) of Diwali for Indians, both at home and in the diaspora.

"There was no better time to introduce it," Anand says of the new ETF.

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