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Thursday, March 3, 2016

Magoon Amplifies His ETF Biz

Reported by Neil Anderson, Managing Editor

Christian Magoon is amping up his ETF business, and he may want to amp up yours, too.

Christian Magoon
Magoon Capital
Chief Executive Officer
The Colorado Springs-based ETF industry veteran, who served as president of Claymore before the sale to Guggenheim, just created his own ETF shop, Chicago-based Amplify Investments, to launch his own ETFs. And he's created an affiliate, Amplify Development, that's all about helping out others' ETF ventures.

The idea behind Amplify Development, Magoon tells MFWire is "getting involved with ETFs that are not going to have the Amplify brand and helping them strategically." That help, he says, could include capital and expertise for an ETF startup, or even "economic participation" in a startup's new ETF. Magoon has been consulting in the ETF industry since 2010, when he launched Magoon Capital.

"We understand that people want to launch ETFs under their own brand," Magoon says. "We're being approached ... It has to be a compelling investment strategy, unique."

Magoon's first Amplify Development deal, he says, was helping launch the Loncar Cancer Immunotherapy ETF in October 2015. He expects to do "several of these types of deals in 2016."

As for Magoon's own ETFs, he launched YieldShares three years ago. ETF-in-a-box shop Exchange Traded Concepts is the investment advisor to the $74-million YieldShares High Income ETF (YYY), while Vident Investment Advisory is the subadvisor.

"I didn't have my own exemptive relief," Magoon says. "I didn't have my own distribution force."

"If you're trying to build something larger that has more scalability I think it's important to have your own exemptive relief and your own ETF trust," Magoon adds. "It allows you to have control ... We're going to be very nimble."

In fall 2015, Magoon received his own exemptive relief, from the SEC, for launching both active and passive ETFs. And thus was Amplify Investments born. He is bringing YieldShares into Amplify, so future YieldShares ETFs will be on Amplify's platform. And although Magoon is looking for allies, Amplify is not going to be another ETF-in-a-box shop.

"We're not trying to be a white label platform ... All of our ETFs will have our brand on it," Magoon says. "We anticipate our indexes and our investment strategies will be from third parties."

We're not an index-development company. We're not an actual asset manager. We will license indexes. We will hire subadvisors.

U.S. Bank is Amplify's "key service provider", Magoon says, handling fund accounting, fund administration, distribution, and transfer agency for Amplify's platform. Amplify itself has distribution and operations staff.

"We're building a team of people we didn't have with YieldShares because it was outsourced," Magoon says. "That's part of the value of the platform."

Magoon has big product development ambitions. New income strategies will be branded as YieldShares ETFs, while other new strategies will be branded as Amplify ETFs.

"Over the next 12 months, we're going to launch anywhere from five to ten ETFs, depending on timing and market conditions," Magoon says. "It'll be a suite."

Magoon is looking for "innovative index providers" and subadvisors, he says. He has already filed for his first new ETF, the Amplify Online Retail ETF, which will be powered by EQM Indexes' online retail index.

As for the existing YieldShares ETF with Exchange-Traded Concepts, Magoon says might keep it where it is or he might eventually move it to the Amplify ETF trust.

Magoon is an alumnus of Wheaton College. He got his start in the industry at Nike Securities (now called First Trust) in the 1990s. After leading West Coast distribution there, he moved to Claymore, eventually rising to president and leading distribution, marketing, and product development. Guggenheim bought Claymore in late 2009, and Magoon moved on and started Magoon Capital. 

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