The largest ETF managed portfolio shop in the business saw its assets under management jump 26.5 percent
in the first three quarters of last year. And then the worm turned against it.
Sanders Wommack of RIABiz provides
the latest update in the saga over performance reporting and backtesting of the Wellesley, Massachusetts-based shop's flagship AlphaSector
U.S. equity indexes. Things took a sharp turn for the worse at F-Squared in the fall when it publicly revealed
a receipt of a Wells notice from the SEC. F-Squared's founding chief, Howard Present
in November as F-Squared brought in Laura Dagan
as the new CEO. Last month F-Squared reached
a $35-million settlement with F-Squared, but not with Present
reports that at least five broker-dealers and RIAs are reevaluating or limiting advisors' access to F-Squared's products: AssetMark
is both cutting off new flows and moving existing assets; Raymond James
has stopped flows to F-Squared; RBC Wealth Management
is blocking use of F-Squared separately managed accounts; Stifel Nicolaus
, like RayJay, has cut off flows to F-Squared; and Wells Fargo Advisors
put F-Squared on a watch list. The trade pub notes that three of those five firms -- RayJay, Stifel, and Wells -- all have branches "just down the street from F-Squared headquarters in the same Wellesley office park."
At least two law firms, RIABiz
adds, Robbins Arroyo
and Rosen Law Firm
, are sniffing around F-Squared, too, looking for class-action fodder.
F-Squared's woes have also translated
into some pain for Virtus
], for whom F-Squared subadvises five mutual funds. RIABiz
says Virtus' shares are down 35 percent their peak, though the trade pubis careful to note that "the SEC has not accused Virtus of any wrongdoing." Those F-Squared subadvised mutual funds still hold about $9.3 billion of F-Squared's in AUM.
Neil Anderson, Managing Editor
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