SQZZ is the first ’40 Act fund that seeks to
capitalize on “short squeeze” opportunities
ETF industry veteran Brad Lamensdorf launched today The Active
Alts Contrarian ETF (NASDAQ: SQZZ), a first-of-its-kind actively
managed ETF that seeks capital appreciation by investing in
companies with solid fundamentals that have very large short
positions and are subject to a short squeeze. Also, as a secondary
investment strategy, Lamensdorf intends to lend out the
hard-to-borrow securities in an effort to earn a stream of monthly
income which has the potential to enhance the total return.
“SQZZ is the first ’40 Act fund to employ this novel strategy of
seeking to capitalize on “short squeeze” opportunities and generate
potential income by getting paid for lending securities,” said
Lamensdorf.
The SQZZ ETF portfolio manager screens securities that are
highly shorted to isolate indications of unexpected values.
“Because of changing market conditions or smart management moves,
highly shorted securities may have promising fundamentals, creating
the potential for a profitable short squeeze,” Lamensdorf
explains.
The ETF invests in securities with market capitalization of $250
million or greater with at least $1 million a day in trading
volume. The strategy does not have to be fully invested at all
times, and it can raise 100% cash if warranted by market
conditions, which may allow the fund to outperform in bear
markets.
Moreover, until a short squeeze materializes, SQZZ investors
earn current income by receiving the majority of the interest from
banks who are paid by borrowers of the security. Typically, when
securities are loaned from an investor’s margin account, the
investor earns nothing— the payment is kept by the bank or broker.
SQZZ is not typical; when it loans securities, the bank will pay
the ETF the majority of the interest it may earn, that income goes
to SQZZ investors in the form of a dividend.
“While securities lending is commonplace, SQZZ will be
partnering with major banks to optimize which securities to lend
and to get the most income for the fund, which may bolster
returns,” Lamensdorf says.
Lamensdorf is the founder and president of the ETF’s
sub-adviser, Active Alts, Inc. He is the co-manager of the actively
managed AdvisorShares Ranger Equity Bear ETF (NYSE Arca: HDGE),
which shorts U.S. traded securities. He also produces the
Lamensdorf Market Timing Report, a newsletter which provides
subscribers with market timing strategy and technical analysis. See
www.lmtr.com. His investment experience includes the position of
market strategist and portfolio manager for Taylor & Company,
the trading unit of Bass Brothers Enterprises in Ft. Worth, Texas.
In 1998 Lamensdorf was the founder and CIO of Tarpon Partners, L.P.
a long/short hedge fund in Dallas, Texas.
SQZZ’s Advisor is Rational Advisors, Huntington, New York, which
received Securities and Exchange Commission approval to issue
SQZZ.
Consider the objectives, risks, charges and expenses carefully
before investing; the prospectus contains this and other
information about the investment company. The prospectus and SAI
may be obtained by going to www.activealts.com or calling Active
Alts Corporation at 203-557-3006. Call 203-557-3006 or go to
www.activealts.com); the prospectus should be read
carefully before investing.
Distributed by Foreside Fund Services, LLC
About The Active Alts Contrarian ETF (NASDAQ; SQZZ)The
Active Alts Contrarian ETF (NASDAQ; SQZZ), a first-of-its-kind
actively managed ETF, seeks capital appreciation by investing in
companies with solid fundamentals that have very large short
positions and are subject to a short squeeze. As a secondary
investment strategy, the ETF hedges its portfolio by lending out
these hard-to-borrow securities in an effort to earn a stream of
income payments.
Contact:
Active Alts Corp
P.O.Box 5087 Westport,Ct 06881 Brad Lamensdorf CEO /
CIO John Lawrence Allen -COO
SQZZ@activealts.com
JA@activeAlts.com
203-557-3006 203-966-8208
DEFINEDA “short squeeze” occurs when investors who have
sold short shares of an equity security seek to rapidly cover or
buy back the short position due to actual or perceived appreciation
in the security, which may occur because of positive news or events
related to the company, its market sector or the market generally.
The activity of short sellers covering their positions has the
potential to add upward momentum to share price increases.
StrategyShares: Active Alts contrarian ETF: SQZZProspectus dated
September 21, 2016
Investment Objective: The investment objective of the Active
Alts Contrarian ETF is to seek current income and capital
appreciation.
Total Annual Operating Expenses 3.41%; Net 1.95%.
RISKS:It is possible to lose money by investing in the Fund.
The Fund may invest in other investment companies, and will
fluctuate in response to the performance of the acquired funds;
therefore, there may be certain additional risks, expenses and tax
results that would not arise if you invested directly in the
securities of the acquired funds.
The Fund may invest in unaffiliated and affiliated money
market funds; therefore, the Advisor is subject to conflicts of
interest in allocating the Fund’s assets among the underlying
funds, as it will receive more revenue from affiliated funds than
from unaffiliated funds.
Although the Shares of the Fund are approved for listing on the
NASDAQ stock market, there can be no assurance an active trading
market will develop and be maintained for the Fund’s
shares.
The Fund invests in foreign companies, which may be
subject to greater risks than investing in domestic companies.
Investing in the securities of small and medium capitalization
companies generally involves greater risk than investing in
larger, more established companies.
The Fund’s investment strategy seeks to invest in stocks in
which a significant amount of market participants have taken
short positions, when the market participants believe the
value of these stocks will decline in the future. If these market
participants are correct, the value of stocks in which the Fund
invests will decrease, and the Fund will lose money on its
investments.
Due to the practice of lending securities, the Fund may
lose the opportunity to sell some of its securities at a desirable
price.
The Fund’s portfolio is actively managed, and will likely have a
higher portfolio turnover rate than non-actively managed
portfolios; and it will likely experience short-term capital gains,
taxed at shareholders’ ordinary income tax rates.
Shares of Exchange Traded Funds (ETFs) are not individually
redeemable and owners of the shares may acquire those shares from
the ETF and tender those shares for redemption to the ETF in
Creation Units only, see the ETF prospectus for additional
information regarding Creation Units. Investors may purchase or
sell ETF shares throughout the day through any brokerage account,
which will result in typical brokerage commissions.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170322005236/en/
Marissa Foy of Gregory FCA for Active Alts,
Inc.610-228-2104activealts@gregoryfca.comorDick Stern of Stern
& Co. for Active Alts, Inc.(212)
888-0044richstern@sternco.com
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