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Friday, January 11, 2008

Aston Bets on a Fund of ETFs

Reported by Erin Kello

Aston Asset Management, the $5 billion AUM ex-ABN Amro subsidiary, is getting into the ETFs game with a fund of funds. The Chicago-based fund firm launched a Smart Portfolios-subadvised mutual fund of ETFs Friday morning.

Look for more fund companies to use this back-door approach into the ETF game in the future as a Smart Portfolios company insider tells The MFWire that the contract with Aston is not exclusive.

"Funds-of-ETFs" give fund firms a short cut in the ETF market. To offer ETFs directly firms need large scale to keep pricing down to compete with the large players such as BGI and SSgA. New ETF players are also seeing capacity constraints in the market due to a shortage of capital at market making firms and limited liquidity in new products. Fund-of-ETFs avoid all of these problems.

The Aston/Smart Allocation ETF Fund, which comes with a net expense ratio of 147 basis points, is the first fund of ETFs from Chicago-based Aston. Aston was formed when ABN AMRO sold its U.S. mutual fund business to Highbury Financial for $38.6 million in 2006.


Company Press Release

Aston Asset Management LLC (“Aston”) is pleased to announce the launch of their new mutual fund of exchange-traded funds (ETFs), the Aston/Smart Allocation ETF Fund (Ticker: ASENX). The new fund is the latest addition to Aston’s already robust line-up, bringing the total number of mutual funds available to individual and institutional investors to twenty-eight.

“We are excited about entering into a Fund of ETFs with the team at Smart Portfolios, LLC,” states Ken Anderson, President of Aston. “This space is a new direction for Aston Funds and one that we feel compliments our current fund line-up well.”

Smart Portfolios, LLC (Smart Portfolios) was formed in April, 2002 as Asset Labs, LLC. The company originally created custom trading algorithms and performance measurement software solutions. In 2004, the firm was registered as an investment adviser to specialize in Extreme Value Theory (EVT). In January 2005 the company changed its name to Smart Portfolios. The firm’s investment strategy is built upon EVT which is an advanced asset allocation methodology and the foundation of their proprietary Dynamic Portfolio Optimization (DPO) asset allocation system. This approach seeks to improve the risk-adjusted return for investors.

Led by Bryce James, Chief Executive Officer (CEO), President and Founder of Smart Portfolios, the portfolio management team will attempt to provide long-term capital appreciation by investing primarily in ETFs. To achieve this, the fund managers will utilize both quantitative and qualitative fundamental analysis to identify those ETFs traded on the U.S. markets, and across multiple asset classes, to create an optimal portfolio that seeks returns in excess of its market benchmark with an equal or lesser amount of risk.

“The move into the ETF space is a natural progression for Aston Funds,” adds Stuart Bilton, Chairman and CEO of Aston. “Our goal is to provide investment solutions that make sense for investors—vehicles that seek to provide the highest level of return with minimal risk. Our partnership with the team at Smart Portfolio aims to do just that, and we believe our investors will embrace this new investment option.”

To request more information please contact Jennifer Connelly at (973)625-1130 or jenn@jcpublicrelations.com.

About Aston Asset Management LLC

Aston Asset Management LLC, headquartered in Chicago, Illinois, is a diversified institutional investment management firm. Aston offers investment management services to the mutual fund and separately managed account markets. As of December 31, 2007, Aston was the adviser to twenty-seven no-load mutual funds with total net assets of approximately $5.0 billion.

Investors are reminded that the Fund invests in ETFs. As a result, your cost of investing will be higher than the cost of investing directly in the underlying ETFs and may be higher than mutual funds that invest directly in stocks and bonds. Also, the Fund may be prevented from fully allocating assets to an ETF due to fund-of-funds investment limitations.

Investors should consider the investment objectives, risks, charges and expenses of the Aston Funds carefully before investing. Please call 800 597-9704 for a prospectus which contains this and other information about the Funds. Read it carefully before you invest or send money. Aston Funds are distributed by PFPC Distributors, Inc.
 

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