SOURCE: Elkhorn Investments

Elkhorn Investments

May 24, 2016 14:08 ET

Elkhorn Launches the First High Quality Preferred ETF (BATS: EPRF)

WHEATON, IL--(Marketwired - May 24, 2016) - Elkhorn Investments, LLC, a pioneer of research-based investing and a strategic partner of Barclays, announced today the launch of the first high quality preferred exchange-traded fund (ETF), the Elkhorn S&P High Quality Preferred ETF (Ticker: EPRF), on the BATS Global Markets Exchange.

"Preferreds remain an area of strong investor interest given their relative high income. We are excited to launch the first high quality preferred ETF, offering investors access to higher income through preferred securities without sacrificing credit quality. Just as investors have preferences for high quality stocks and bonds, we see similar demand for high quality preferreds and are excited to add EPRF to our product lineup." said Ben Fulton, CEO of Elkhorn Investments.

The Elkhorn S&P High Quality Preferred ETF tracks the S&P U.S. High Quality Preferred Stock Index, which selects fixed-rate investment grade preferred issues (BBB- or higher) from U.S. listed preferred stocks and overweights cumulative versus non-cumulative preferreds.

"Investment grade and cumulative preferreds have historically provided lower drawdowns compared with the broader preferred market," says Graham Day, SVP, Head of Product and Research at Elkhorn. "EPRF is unique in that it offers preferred investors tactical opportunities to improve the credit quality of their preferred allocation. Most preferred ETFs on the market today tend to overweight junk rated issues which can negatively impact the portfolio in down markets."

"One of the benefits high quality preferreds can provide is portfolio diversification due to low overlap with existing preferred strategies in addition to enhanced income return over time," says Kevin Horan, Director, Fixed Income Indices, at S&P Dow Jones Indices.

EPRF's index, the S&P U.S. High Quality Preferred Stock Index, is comprised of 100% investment grade issues while the S&P U.S. Preferred Stock Index, has 58% speculative or non-rated issues. EPRF's index yield is 5.75% compared to the broader indexes' yield of 6.34%.*

The launch of the Elkhorn S&P High Quality Preferred ETF adds to Elkhorn's structurally diverse product lineup of ETFs, Managed Accounts, Unit Investment Trusts (UITs), Structured Notes and Market-Linked CDs (MLCDs), including the first-ever capital expenditures ETF, Elkhorn S&P 500 Capital Expenditures Portfolio (CAPX), and Elkhorn FTSE RAFI U.S. Equity Income ETF (ELKU). To learn more about EPRF, please visit www.elkhorn.com/eprf.

About Elkhorn

Founded in 2013 by Ben Fulton, a recognized leader and pioneer of the ETF industry, Elkhorn is redefining the relationship between investment strategy and product structure: designing, sponsoring and distributing innovative, research-based investments solutions. At Elkhorn, research drives design and advisors drive structural decisions. Elkhorn has a strategic relationship with Barclays which has increased the capacity of investment solutions offered by Elkhorn. To learn more about Elkhorn please visit www.elkhorn.com.

About S&P

S&P® is a registered trademark of Standard & Poor's Financial Services LLC ("S&P"), a part of McGraw Hill Financial. Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones"). These trademarks have been licensed to S&P Dow Jones Indices LLC. It is not possible to invest directly in an index. S&P Dow Jones Indices LLC, Dow Jones, S&P and their respective affiliates (collectively "S&P Dow Jones Indices") do not sponsor, endorse, sell, or promote any investment fund or other investment vehicle that is offered by third parties and that seeks to provide an investment return based on the performance of any index. This document does not constitute an offer of services in jurisdictions where S&P Dow Jones Indices does not have the necessary licenses. S&P Dow Jones Indices receives compensation in connection with licensing its indices to third parties.

*Source: S&P Dow Jones Indices LLC, as of 5/16/2016

Important Information

Drawdown is the loss between the peak and trough of a market cycle. A cumulative preferred stock is a type of preferred stock with a provision that stipulates that if any dividends have been omitted in the past, they must be paid out to preferred shareholders first, before common shareholders can receive dividends. Junk rated is any security with a credit rating below BBB-.

There are risks involved with investing in ETFs, including possible loss of money. Shares are not actively managed and are subject to risks similar to those of stocks, including those regarding short selling and margin maintenance requirements. Ordinary brokerage commissions apply. The fund's return may not match the return of the underlying index. The fund's holdings may differ significantly from the securities held in the index. The fund invests in preferred securities which may be subject to many of the risks associated with debt securities, including interest rate risk. The fund invests in equity securities which may be subject to volatile price fluctuations. Because the fund is non-diversified and can invest a greater portion of its assets in securities of individual issuers than a diversified fund, changes in the market value of a single investment could cause greater fluctuations in share price. The fund is new and has a limited operating history.

Shares are not individually redeemable and owners of the shares may acquire those shares from the fund and tender those shares for redemption to the fund in Creation Units only, typically consisting of 50,000 Shares.

ALPS Distributors, Inc. is the distributor of Elkhorn exchange-traded funds.

Elkhorn Investments, LLC, S&P Dow Jones Indices LLC and ALPS Distributors, Inc. are not affiliated with each other. 

An investor should consider the investment objectives, risks, charges and expenses of the Fund carefully before investing. To obtain a prospectus containing this and other information, please call 1.630.384.8700. Read the prospectus carefully before investing.

ELK000189 5/24/2017

Contact Information

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    BC Capital Partners
    303-415-2290
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