GREENWICH, CT, May 12, 2016 - Interactive Brokers Group, Inc. (NASDAQ: IBKR), an automated global electronic broker and market maker, today announced plans to offer NextSharesTM exchange-traded managed funds (NextShares) to retail investors and financial professionals through its investing and trading platforms.
NextShares are a new way to invest in actively managed strategies. Because they are actively managed, NextShares offer the potential for benchmark-beating returns by applying their manager's proprietary investment research. Because they trade on an exchange, NextShares may offer cost and tax efficiencies that can enhance shareholder returns. NextShares were developed by NextShares Solutions LLC, an affiliate of Eaton Vance Corp. (Eaton Vance), and are expected to be offered by a range of well-known asset managers and across fund asset classes. The first NextShares funds began trading on the Nasdaq Stock Market LLC earlier this year.
"Offering high-quality services at a lower cost and providing our customers with compelling investment opportunities are integral features of our vision," said Thomas Peterffy, Chairman, Founder and Chief Executive Officer, Interactive Brokers Group, Inc. "NextShares support this vision and can help investors meet their long-term investment goals."
"The potential performance and tax advantages of NextShares and the advanced trading technology and customer focus of Interactive Brokers are a powerful combination," said Stephen W. Clarke, President of NextShares Solutions. "NextShares on the Interactive Brokers platform should be a highly competitive alternative to mutual funds offered on fund supermarkets. We are proud to work together to provide greater access to NextShares."
The NextShares structure is broadly applicable across all asset classes in which mutual funds invest. Eaton Vance launched an initial three NextShares funds in the first quarter of this year and expects to introduce additional funds later this year. Ivy Investments (Ivy) has announced plans to launch its first three NextShares funds by late summer. Including Eaton Vance and Ivy, a dozen fund sponsors have indicated their intent to offer NextShares funds by filing exemptive applications with the U.S. Securities and Exchange Commission and entering into preliminary agreements with NextShares Solutions.
About Interactive Brokers Group, Inc.
Interactive Brokers Group, Inc., together with its subsidiaries, is an automated global electronic broker that specializes in catering to financial professionals by offering state-of-the-art trading technology, superior execution capabilities, worldwide electronic access, and sophisticated risk management tools at exceptionally low costs. The brokerage trading platform utilizes the same innovative technology as the Company's market making business, which specializes in routing orders and executing and processing trades in securities, futures, foreign exchange instruments, bonds and funds on more than 100 electronic exchanges and trading venues around the world. As a market maker, we provide liquidity at these marketplaces and, as a broker, we provide professional traders and investors with electronic access to stocks, options, futures, forex, bonds and mutual funds from a single IBKR Integrated Investment Account. Employing proprietary software on a global communications network, Interactive Brokers is continuously integrating its software with a growing number of exchanges and trading venues into one automatically functioning, computerized platform that requires minimal human intervention.
About NextShares Solutions and Eaton Vance
NextShares Solutions LLC is a wholly owned subsidiary of Eaton Vance formed to develop and commercialize NextShares. Aspects of the operation of NextShares are protected intellectual property owned by NextShares Solutions. For more information, visit nextshares.com.
Eaton Vance (NYSE: EV) is a leading global asset manager whose history dates to 1924. With offices in North America, Europe, Asia and Australia, Eaton Vance and its affiliates managed $315.1 billion in assets as of March 31, 2016, offering individuals and institutions a broad array of investment strategies and wealth management solutions. For more information, visit eatonvance.com.
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The information contained herein is provided for informational purposes only, is not intended as investment or tax advice, and does not constitute a solicitation of an offer to buy or sell specific securities.
Shares of NextShares funds are normally bought and sold in the secondary market through a broker, and may not be individually purchased or redeemed from the fund. In the secondary market, buyers and sellers transact with each other, rather than with the fund. These transactions do not affect the fund or its investments. When a NextShares fund does issue or redeem shares, the transactions are made through designated authorized participants and are normally in kind when practicable, meaning that the fund receives or delivers securities rather than cash. By transacting in kind, a NextShares fund can lower its trading costs and enhance fund tax efficiency by avoiding forced sales of securities to meet redemptions. As exchange-traded securities, NextShares can operate with low transfer agency expenses by utilizing the same highly efficient share processing system as used for exchange-listed stocks.
Market trading prices of NextShares are linked to the fund's next-computed net asset value (NAV) and will vary from NAV by a market-determined premium or discount, which may be zero. Buyers and sellers of NextShares will not know the value of their purchases and sales until after the fund's NAV is determined at the end of the trading day. Market trading prices may vary significantly from anticipated levels. NextShares do not offer investors the opportunity to buy and sell intraday based on current (versus end-of-day) determinations of fund value. NextShares trade execution prices will fluctuate based on changes in NAV. Although limit orders may be used to control trading costs, they cannot be used to control or limit trade execution prices. As a new type of fund, NextShares have a limited operating history and may initially be available through a limited number of brokers. There can be no guarantee that an active trading market for NextShares will develop or be maintained, or that their listing will continue unchanged. Buying and selling NextShares may require payment of brokerage commissions and expose transacting shareholders to other trading costs. Frequent trading may detract from realized investment returns. The return on a shareholder's NextShares investment will be reduced if the shareholder sells shares at a greater discount or narrower premium to NAV than he or she acquired the shares. NextShares funds issue and redeem shares only in specified creation unit quantities in transactions by or through authorized participants. In such transactions, a fund issues and redeems shares in exchange for the basket of securities, other instruments and/or cash that the fund specifies each business day. The basket is not intended to be representative of the fund's current portfolio positions and may vary significantly from current positions.
NextSharesTM is a trademark of NextShares Solutions LLC. All rights reserved.