Small space ship flys like a rocket through the air

LongPoint Asset Management Inc., which is helmed by Steve Hawkins, could soon launch its first ETF.

The firm filed a preliminary prospectus with Canadian securities commissions earlier this month for the ForAll Core & More U.S. Equity Index ETF. The product would be a dynamic asset-allocation ETF that uses other ETFs to track an index created by ForAll Investment Research Inc., which is based in Powell River, B.C.

The prospectus proposes that the ETF trade on the Cboe Exchange under the ticker FORU.

Twenty percent of the ForAll index is the core: it always tracks the S&P 500 Fossil Fuel Reserves Free index, using the SPDR S&P 500 Fossil Fuel Reserves Free Index ETF (SPYX). The rest of the index dynamically allocates among four ETFs: 30% will dynamically allocate between the BetaPro NASDAQ-100 2x Daily Bull ETF and the BetaPro S&P 500 VIX Short-Term Futures ETF; and 50% will dynamically allocate between SPYX and the iShares Gold Trust.

Index allocations shift as the market changes direction, said Reid Baker, president and CEO of ForAll Investment Research. In falling markets, the leverage and SPYX allocations of the index may decrease; in rising markets, they may increase.

LongPoint’s prospectus proposes that FORU be hedged to the Canadian dollar. The prospectus also states FORU’s maximum annualized management fee would be 1.08% for months with positive total returns, and zero for months with negative total returns.

“Hopefully the [prospective] launch of this ETF will add substance and credibility to LongPoint and its capabilities,” said Steve Hawkins, CEO of LongPoint. “We’re very excited to be putting our first potential ETF into the retail marketplace, which will hopefully be the first of many.”

If the prospectus is approved, FORU will be subadvised by U.S.-based Tidal Investments LLC, which provides ETF management services.

“I have a long history with founders of Tidal,” Hawkins said. “As we’re trying to build a broader brand here in Canada, working with one of the biggest partnership platforms in the U.S. made sense for us from a logistics perspective.”

Baker said he wanted to launch an ETF himself based on the index, but many folks suggested he consider partnering with another firm to reduce upfront costs. After approaching LongPoint’s predecessor firm, “I came to the conclusion pretty quickly that this was the best way to get [an] ETF launched,” he said.

Baker said he came up with the idea for the index more than six years ago. “To get to this point … is an amazing feeling,” he said.