F-Squared Investments Filesfor Bankruptcy

Posted on July 9th, 2015 at 2:22 PM
F-Squared Investments Filesfor Bankruptcy

From the Desk of Jim Eccleston at Eccleston Law LLC:

F-Squared Investments Inc. has filed for bankruptcy. F-Squared had claimed that its rules-based strategy could avoid violent market swings — by opportunistically trading in and out of nine industrial-sector ETFs. That pitch appealed to advisers stung by the 2008 free-fall of stock markets. The firm built itself from a virtual nonentity in 2008 to the force behind a $28.5 billion strategy, as of June 2014.

Those assets have fallen significantly: The firm saw nearly $8 billion in asset declines in its ETF strategies in the year ended March 31, 2015. The mutual fund distributor Virtus Investment Partners Inc. also cut F-Squared as a manager on five of its products with some $5.7 billion in assets, including Virtus Premium Alpha Sector.

F-Squared, its mutual-fund distribution partner and financial advisors who recommended the investment are under the microscope. At least one broker-dealer, Wells Fargo Advisors, currently faces investor loss recovery claims in arbitration.

Broadmeadow Capital, which is affiliated with F-Squared rival Good Harbor Financial, is petitioning the bankruptcy court to take over the remaining assets.

The attorneys of Eccleston Law LLC represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 65 years in delivering the highest quality legal services.

Related Attorneys: James J. Eccleston

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