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While the asset management industry has been watching and waiting for a mutual fund to become an ETF for the first time, it turns out history was being made with a conversion of another kind.
A tiny U.S. hedge fund has just become the first to convert into an exchange-traded fund.
The actively managed Upholdings Compound Kings ETF (KNGS) began trading last week. It's a new wrapper for a tech-heavy portfolio that was started in March 2019 by Nashville, Tennessee-based Upholdings Funds LLC.
The firm wanted to expand its investor base — in particular to include retail investors — so began exploring the process of converting the $3 million hedge fund last March.
Plans were formally filed with the Securities and Exchanges Commission in October.
"You shouldn't have to be rich and invest privately in order to go after managers who are trying to beat benchmarks," said Robert Cantwell, the founder and chief executive of Upholdings Group.
The move is about "expanding access to high quality growth investing to non-accredited investors," he said.
