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LocalShares to launch Nashville exchange-traded fund


LocalShares is to launch the first city-based exchange-traded fund on the New York Stock Exchange (NYSE Arca) on 1 August.

The Nashville Area ETF will enable investment in a basket of qualifying Nashville area publicly-traded companies.
Opening day shares for NASH will initially be priced at USD25 per share and available through any securities broker. The Nashville Area ETF will provide an investment security comprised of publicly traded companies, which are part of middle Tennessee’s diverse economy.
LocalShares, the investment adviser of the Nashville Area ETF, was founded by Nashville business executives Elizabeth Seigenthaler Courtney (pictured), chief executive of Seigenthaler Public Relations; William S Decker, CEO of Decker Wealth Management; and Michael D Shmerling, chairman of XMi Holdings. It aims to provide financial services products focused on the potential of geographic locations, such as American cities, as demonstrated by the publicly-traded companies that surround them.
"LocalShares has spent several years creating this concept, as well as developing our selection formula to carefully pave the way to launch the Nashville Area ETF," says Shmerling. "We believe that communities like Nashville provide significant value-add to the companies that are headquartered here. In middle Tennessee, these attributes include low taxes, a strategic location and a state where people have the right to work. Collectively, this is a solid group of diverse companies and we look forward to bringing them together in Nashville Area ETF."
The Nashville Area ETF tracks the LocalShares Nashville Index, which uses an algorithm to identify and then weight the companies to be included in the index. The formula accounts for positive earnings, momentum and valuation metrics. In order to be included in the portfolio, companies must be headquartered in Davidson County or its surrounding counties and must meet certain requirements including, but not limited to:
•             Market capitalisations of more than USD100m; and
•             Average daily volume of stock traded that exceeds 50,000 shares.
According to Courtney, the concept of the city-based ETF was developed based on the premise that every city’s economy functions as its own ecosystem with unique resources, legislation and demographics inextricably interwoven. In developing a plan for a launch city, LocalShares concluded that Nashville met the fundamental criteria necessary for the concept. Nashville has been called America’s healthcare hub by the Wall Street Journal, was the number one market in the country (over one million persons) for job growth in 2012 according to the Bureau of Labor Statistics, and has regularly placed high on national lists for most business friendly cities.
"I welcome the creation of the first city-based exchange-traded fund to Nashville, which shines a spotlight on the city’s diverse economy and attractiveness as a location for corporate headquarters," says Nashville Mayor Karl Dean. "I am proud of the recognition this ETF brings to the strength of our region and the publicly-traded companies in our area. This further validates that Nashville is one of the top markets in the country for job creation, ease of doing business and quality of life."
Based on the current composition of the LocalShares Nashville Index, the Nashville Area ETF is expected to include 24 companies at its list date that had more than USD94bn in revenue in 2012 and support more than 29,000 jobs in the Nashville area.

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